The relaxation of European Union borrowing rules will be "very helpful" to the Government's efforts to deliver the National Development Plan, a top civil servant has said.
Under new Eurostat rules announced on Wednesday, the private sector will be able to borrow to develop State projects without affecting the Government's own debt ratings.
The change should mean that the Government would be able to divert money into projects that were less likely to attract private investment, the secretary general of the Department of Transport, Ms Julie O'Neill, said.
Speaking before the Dáil's Public Accounts Committee, Ms O'Neill said a cross-departmental committee of officials was studying the implications of the Eurostat ruling. However, private companies would have to bear real risk and be subject to "real and substantial" penalties if they failed to honour any of the terms of a public-private partnership, she said.
Meanwhile, the upgrading of the Red Cow roundabout on the M50 around Dublin will cost €37 million and take two years to complete.
Acknowledging that the work would cause traffic delays, Ms O'Neill said that this was unavoidable. "We can leave things as they are or we can take the short-term pain to make them better," she said.
Inflation in road building contracts was now down to 5 per cent annually, following the negotiation of tighter contracts by the National Roads Authority.
The greater involvement of foreign construction companies had helped to dampen inflationary pressures, she told former Fine Gael leader, Limerick East TD, Mr Michael Noonan.
"I am satisfied now that the arrangements entered into by the NRA on public-private partnerships means that there is a very significant transfer of risk to the private sector," she said.
However, Mr Noonan said the Government must show clearly that privately funded projects were cheaper for the State in the long run, since they will mean tolls in some cases.
The Comptroller and Auditor General, Mr John Purcell, also warned that the Department of Transport had been "at huge risk" of serious fraud during 2002 because of accountancy mistakes.
The Department's finance unit failed to reconcile €1.7 million worth of payments against its bank accounts, Mr Purcell told the Public Accounts Committee, following an audit.
The mistakes occurred, said Ms O'Neill, because the finance unit had been affected by staff losses, illnesses and the disturbance created in the Department in 2002 after the general election.
Mr Purcell told TDs: "There was no loss of public funds here. But it isn't an academic accounting exercise either, because bank reconciliations were not carried out for the best part of a year.
"It left the Department in a vulnerable position. If there had been certain types of fraud it would not have been detected. It was a risk that had to be addressed," he said.
