A change in European Union rules governing borrowing for major infrastructure projects has been welcomed by the Minister for Transport, Mr Brennan.
Under the new regulations announced today by Eurostat, the EU's statistical office, the rules controlling government investment in public-private partnerships (PPPs) have been relaxed.
It means the Government will be able to borrow more money to spend on PPPs without breaking the EU's Stability and Growth Pact, which restricts investment in infrastructure projects involving joint public and private funding.
The Government has been at the forefront of a concerted lobbying of the European Commission to change the rules.
Mr Brennan said today he would be studying the Eurostat statement in detail, but said it appeared to be an "exciting" development. "It does relax the rules substantially," he said. "Private sector investment will be easier to attract."
Eurostat recommended that assets involved in a PPP should be classified as non-government assets and recorded off-balance sheet for governments, meaning State budgets would not be affected. The decision applies only in cases where the government is the main purchaser of the services proved by a private contractor.
However, the new regulation will only apply if the private partner bears the construction risk, and bears either the availability or demand risk, or both. If the construction risk is borne by the government, or if the private partner bears only the construction risk and no other risks, the assets will be classified as government assets.
These risks will be assessed by National Statistical Offices in all member and accession states, beginning next month.
The development is likely to mean speedy progress on a number of infrastructure projects funded jointly by the Government and the private sector, including toll roads and the Dublin Metro system. The redevelopment of Cork School of Music has also been stalled pending the outcome of the negotiations on PPPs.
Today's decision came after consultation last December with 14 national statistical institutes and 13 national central banks among the EU's 15 member states. All but one approved the proposal.
