BUDGET COUNTDOWN: Given the Minister for Finance's penchant for throwing in the odd surprise on Budget Day, it seems a trifle foolhardy to presume that the earth will not move in some fashion in the Dáil next Wednesday.
The point in the Budget speech at which this will happen remains to be seen, but consensus opinion among observers suggests it will not be during the section on capital spending. Instead, Mr McCreevy is expected to focus conservatively on the capital investment that is already in progress and to outline a plan to get better value for money from such spending in the future.
Whatever happens, much of the mystery on the capital front has already been removed with last month's Estimates setting a rigid 2 per cent limit on capital spending growth for next year. This will see the amount spent on areas such as roads or railways in 2004 dropping in actual terms at a time when the National Development Plan (NDP) is already well behind schedule.
Even with this virtual pause in spending, the Government's plans to upgrade the State's key infrastructural networks remain broadly in place. Some €1.2 billion will, for example, be spent on 27 major road projects next year and public transport will eat up a further €646 million. The number of bus lanes in Dublin will double at a cost of €40 million and the much-maligned Luas will get €125 million. The list goes on.
As the Minister himself remarked at the Estimates presentation last month: "When we stop digging up the streets - and we will - we will see the difference."
Back with the Budget, the belief among economists is the Minister will underline what one calls "aspirational stuff" such as organising spending over a five-year timeframe rather than one year at a time, and agreeing fixed-price contracts before a brick has been laid.
This should go some way to meeting the concerns of the Economic and Social Research Institute (ESRI), which recently argued that money should not be borrowed to fund infrastructure in the future without securing good value on existing projects.
Such worries have good justification, with a report from consultants, Indecon, revealing in October that estimates on what the roads aspect of the NDP would cost have ballooned from €6.8 billion to €16 billion since the plan was launched.
The report concluded that, of the five major inter-city routes that feature in the NDP, only one - the road from Dublin to the Border - had saved a single minute for travellers. This claim, which was later refuted by the National Roads Authority, is certain to have generated a few shivers in the Department of Finance.
Presuming then that the purse strings are firmly tied on December 3rd, Mr McCreevy is also likely to put the spotlight on generating extra capital funds from non-Exchequer sources such as public-private partnerships. Budget 2003 included a paragraph on this area but progress has been limited since then.
Figures included in the Estimates suggest that this situation is about to change, however, with the Minister calculating that a cool €150 million will come from such structures next year.
Attitudes towards PPPs tend to be mixed, with supporters trumpeting their ability to speed up capital investment while reducing Exchequer risk. Detractors on the other hand argue they do not actually represent a cheap source of funding because of the risk transfer that they entail.
Other potential funding taps for the Minister include the National Pensions Reserve Fund, which is known to be in negotiations with the European Investment Bank about jointly funding Irish infrastructure projects though a special loan structure.
Again, though, opinion is mixed, with one economist dismissing such funding as the Government "moving money from one bank account to another".
