James Bannon (Longford-Westmeath, Fine Gael)
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Question 106: To ask the Minister for Finance his views on new sources of funding for infrastructural development; and his further views on disposing of certain State assets to provide seed capital for an infrastructural programme. [5180/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware, future investment in critical infrastructure remains a Government priority. Despite the challenging budgetary position, we are committed to maintaining exchequer capital investment of €6.445bn in 2010 and €5.5bn for each year thereafter to 2016. This equates to 5% of GNP and is one of the highest ratios in the EU.

Nonetheless, the Government keeps under continuous review the potential for encouraging and facilitating private sector finance for public infrastructure. My Department has engaged intensively with various private sector parties over the past year to explore the potential for innovative funding mechanisms that could help deliver crucial public infrastructure within the framework of Public Private Partnerships. Obviously, this will only be done on the basis that the terms are right for the State and that any investment makes economic sense. In addition, we have to be mindful of the potential impact of any financing approach on the GGB. The financing of investment through Exchequer borrowing affects the GGB in the normal manner. For other funding options the impact can vary and the treatment is more complex.

I would also note that the Government is committed to exploring and utilising the potential for EIB investment in PPP projects. The EIB has been a major investor in the PPP Roads programme. It may now be willing to consider making funds available for projects in other sectors. Indeed, I am happy to note that the EIB has agreed to invest in the second schools bundle which is currently in procurement.

The State owns significant assets of various types. Given the current economic conditions and the pressure on Exchequer spending, it is vital that this asset base is managed to optimum effect. Any Government consideration of future asset disposals would have to take account of overall policy in the Semi-State bodies, including policy on strategic assets. It could be that asset disposals have the potential to help future infrastructure investment. For example, I announced in Budget 2010 that a multi-annual investment programme in important mental health projects is to be funded from the sale of surplus HSE assets. Some €43 million of additional funding was allocated on this basis for 2010, and further funding for mental health projects will be provided as asset sales allow. The Government will keep an open mind on the potential for other asset disposals that might help infrastructure delivery.