Fine Gael plans €6bn-€7bn investment in ‘next-gen’ infrastructure

3 Dec 2010

In its pre-Budget plan, Fine Gael said today that if in power it would invest an additional €6bn-€7bn in “next-generation” infrastructure in energy, broadband, forestry and water. It also unveiled a stimulus plan for the local technology sector.

In its Budget 2011 document, Fine Gael said it would cut the public sector headcount by 10pc, involving 18,000 voluntary redundancies and would offer a “demand side” stimulus to boost jobs in parallel with cutbacks in Government borrowing over the next four years.

This includes accelerating capital allowances on business software investments to support a local high-tech industry, an area no Irish Government has attempted to support before.

Under Fine Gael’s NewERA plan, streamlined and restructured semi-State companies will invest an additional €6bn-€7bn, over and above current plans, over the next four years in “next-generation” infrastructures in energy, broadband, forestry and water.

The investments, it says, will be financed by both public and private pension funds and the proceeds of the sale of state assets. These will be profitable, commercial investments, repaid by charges on users, businesses and consumers.

Priority areas for investment would be:

The creation of a 21st century ‘smart grid’

The goal is to accelerate and, if necessary, modify the network development plans of the ESB and Eirgrid. The new smart grid will support the roll out of greater renewable energy generation and involve the installation of smart meters in every home. All options for electricity storage will be vigorously explored.

The rollout of a ‘Next Generation Telecoms Network’

NewERA will work closely with the private sector to provide next-generation access (high‐speed broadband) to every home and business in the state. Fine Gael said it believes it is absolutely vital that any funding from NewERA results in additional, substantial investment from the private telecom operators.

Transforming the water network

Fine Gael said it will create Irish Water, a new State company that will take over the water investment and maintenance programmes of the 34 existing local authorities. It will oversee a multi-billion programme to upgrade the State’s inefficient and leaking water infrastructure.

In discussions with the IMF, Fine Gael said it has confirmed that funds from the National Pension Reserve Fund and proceeds from the sale of State assets remain available, under conditions to be agreed, to finance the NewERA stimulus plan.

Stimulating the indigenous technology sector

In terms of stimulating the indigenous technology sector, Fine Gael said it would help Irish businesses to finance additional investment in technology through accelerated capital allowances (from eight years to three years) on software purchases.

“This will not only support local, high-tech jobs in the software industry but will also facilitate productivity increase across the economy,” the Fine Gael document said.

Fine Gael also plans a €10m one-off marketing budget for State agencies to restore “Ireland’s battered business reputation” across the globe.

Another area that might see investment in technology – potentially cloud computing technology – is a plan to target the high cost of annual social welfare fraud through the establishment of a single payments and entitlements system.

For the past two years, Silicon Republic has run a campaign to highlight the imperative of creating the digital infrastructure and services upon which the success of our economy depends.

The website for Digital 21 provides a forum for all those interested in accelerating the development of Ireland’s Digital Economy.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years