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The National Capital Plan

The National Capital Plan

The National Capital Plan

The National Capital Plan is truly remarkable in its scale and ambition. Something that has been dearly lacking for some time. That level of scale and ambition fits with a country that has thrown off the shackles of the recession and is no longer just “recovering”. However delivering infrastructure is challenging, writes Michele Connolly, Head of Corporate Finance at KPMG.

Previous Capital plans, albeit not of this scale, that were remarkable more so for the level of dust they gathered on the shelf post announcement. So how do we do it differently this time and in a way that will help underpin ongoing economic growth? Proper oversight, resourcing and planning is key to success.

A role for a CEO

A plan of this scale needs an implementation plan of similar vision. The projects and investments will be spread across many Government Departments and Agencies. That can prove impossible to monitor and plan in a cohesive fashion. We need to have someone in charge of and accountable for delivery of this plan. A central implementation taskforce if you will, tasked with driving delivery and elimination of hurdles and bottlenecks along the way. Indeed when you think about a spend of €100 billion over 10 years why wouldn’t it have its own designated Chief Executive. However, the imperative now is speedy implementation so nothing should slow that approach. Big projects also need strong governance and appropriate scale of delivery teams. Too often we are reluctant to invest in the development staff needed to deliver large projects, deeming it a costly overhead. That is a short sighted viewpoint.

That implementation team needs to consider how best to prioritise the delivery of the projects so they are not flooding the market at the same time. Best practice internationally is moving towards prioritisation based on economic or better still socio economic benefit. That takes local politics out of the equation to some degree which can only be good.

Overcoming the hurdles

Globally the trend in infrastructure is that projects in the developed world have ever increasing timescales to delivery whereas those in less developed or less democratic countries see none of the delays that we do. The ideal approach probably lies somewhere in the middle. In order to deliver a plan of this magnitude, we need to seriously look at the typical hurdles in the path of such developments and have a cohesive approach to try and minimise those. This will include planning and regulatory related delays but there is also a need to speed up the pace of decision making and all the pre procurement approvals. Procurement itself is dictated by European Directives so that is to some degree out of our control.

Attracting talent back to Ireland

The scale of development planned here needs a significant scale of skilled labour resource to deliver it. The recent employment statistics published indicate that whilst we are nearing full employment, employment in the construction sector is only at 45% of its previous peak. So one could validly ask the question as to where are the construction workers going to come from to deliver all these projects, not to mention address our housing crisis.

A plan of this scale however will attract international attention and if we market it right, should attract much needed skills and talent back to Ireland. International companies will sit up and take notice. The scale involved justifies them taking a look at establishing an operation here to take advantage of the forthcoming opportunities. Likewise opportunities would abound for returning emigrants. But we can’t be complacent. We do need to reach out to overseas markets to remind them that Ireland is a great place to do business and officially out of the recovery ward. Akin to an IDA trade mission but profiling infrastructure and employment opportunities.

Ireland has underinvested in infrastructure throughout the recession. Compared to our peer group across Europe we are well behind in our level of investment relative to GDP. That was understandable when times were tough. Ideally investment in infrastructure should be on a sustainable basis – sustainable in the sense of a long term plan that continues notwithstanding external factors. It is widely accepted that investment in infrastructure is an essential component to deliver and sustain economic growth.

Given we are now out of the recovery ward, now is the time to invest to provide some element of future proofing of the economy against future economic shocks, and particularly of course that of Brexit. Government has recognised the need to invest. We need it to be recognised also that investment needs to continue at a steady pace not a stop start basis. So the plan needs cross party support and the implementation taskforce needs to ensure that it survives any future changes in the political landscape or budgetary decisions.

Sustainability in the face of change

Infrastructure planning also needs to be sustainable to address the pace of change. 10 years ago the iphone wasn’t around, nor were there any apps to help you plan your journey or order your taxi. Who knows what the rapid pace of change will deliver in the coming years. Yet infrastructure planning has to look to the long term and try to predict what society will need. That is almost an impossible task. The best we can do is think ahead and consider various different scenarios so we set up projects to adapt to change as best we can.

Government are about to put forward a vision. That vision needs a plan to implement it, proper oversight and it needs to be future proofed.

This article originally appeared in The Irish Times and is reproduced here with their kind permission.