Project Ireland 2040: One year on

It’s almost a year since Project Ireland 2040 (which includes the National Development Plan) was announced. What has happened since? We have seen the launch of the Rural, Urban, Technology and Climate Action Funds. We have also seen some progress on capital projects, but, for many, slower than planned, writes Robert Costello, Director at KPMG.

Governance

Following the announcement of Project Ireland 2040, the Department of Public Expenditure and Reform (DPER) established the Investment and Projects Office to develop cross-sectoral dialogue, identify national priorities and drive value for money reforms. While this is welcomed we believe it should take a stronger role in the delivery of strategic infrastructure projects to break down the silos that exist across government and to leverage the expertise across departments and agencies to deliver capital projects.

DPER has set out an Investment Projects and Programmes Tracker for capital projects and programmes in the National Development Plan (NDP), however it remains high level in many cases.

The Project Ireland 2040 Delivery Board has also been established consisting of secretary generals from departments and representatives from state agencies. The objective of this board is to provide strategic direction and leadership, oversee implementation structures and performance and ensure a coordinated and collaborative whole of government approach. It would be useful for this group to report to government (and the public) on a regular basis on the progress of the NDP. For example, in the UK, the National Infrastructure Commission publishes an annual monitoring report, taking stock of the UK Government’s progress on the delivery of infrastructure projects.

The Public Spending Code (PSC)

The Public Spending Code sets out the guidance for government capital spending. Existing methodologies that are used to undertake project and economic appraisals are biased towards the selection of new projects. While the theory and general principles can be applied to both build and non-build/ technology-based initiatives, a lack of proven examples for non-build initiatives means that practitioners must invest more time, resources and political capital to demonstrate that the implemented approach is consistent with the recommended approach. In some cases, existing asset maintenance or management may offer a more appropriate capital investment. In addition, the PSC methodologies should be considered and applied in the early stages of the appraisal of a capital project to enable better planning and funding for delivery.

Financing

The National Development Plan sets out a plan to provide €116 billion in funding over 10 years. €91 billion of this is exchequer funding, while €25 billion is expected to come from State companies. It includes limited opportunities for private finance. We would argue that this should not be the case and the benefits of models that include private finance should also be assessed in detail as part of an appraisals process. However the absence of quality data to assess the risks of traditional procurement on a reasonable whole of life basis, means the assessment of PPPs against traditional procurement is not on a level-playing field basis.

What needs to change?

To meet the objectives of Project Ireland 2040, we need to take a planned and integrated approach to delivery. This should include:

• A well-resourced Investment Projects and Programmes Office to breakdown departmental silos and to utilise existing expertise;
• A more detailed Investment Projects and Programmes Tracker including target timelines, spending profiles and procurement models;
• A Project Ireland 2040 Delivery Board that is focused on prioritisation of projects across government and drives implementation and resolution of blockages;
• A review of the Public Spending Code and associated guidelines to ensure more robust project appraisals and consideration of alternative solutions including asset management options where relevant; and
• A more detailed consideration of financing models, particularly where alternative sources of funding such as user charging is possible.

E: robert.costello@kpmg.ie
T: +353 1700 4428
T: +353 (0)87 050 4428