Waterford TD John Deasy says there’s still significant scope for the Southeast to share in the €7.9bn Ireland Strategic Investment Fund — the bulk of which has still to be allocated.
Last week the Fund reported that it’s in advanced discussions with over 50 different investment opportunities valued at a combined €2.4bn.
It expects to put over €750m into leveraging additional projects this year and is open to all commercial ideas (see www.isif.ie). Matching private sector capital could double its total worth.
The Fund’s operators, the National Treasury Management Agency, are targeting a minimum average return of 4% from its entire investment portfolio. Commercial viability is a key prerequisite when it comes to sizing up applications.
With “economic impact” also part of its ‘double bottom line’ mandate, Deputy Deasy successfully lobbied at legislation stage to make sure the Fund accounts for where projects are delivered.
“I was concerned Dublin would dominate and so far that’s been borne out, with 47% of approved projects being based in the capital and the remainder spread around the country — two-thirds in the rest of Leinster and 18% in Munster.
“However, there’s still nearly €5.5bn of public capital to work with between now and 2020 so hopefully investors can come in with proposals that target those regions most in need of a lift.”
So far the state stimulus measure — using what was the National Pension Reserve Fund — has invested in capital development projects, finance schemes for SMEs, and recently, in conjunction with Glanbia, an offer of €100m in ‘MilkFlex’ loan supports to the dairy sector.
Deasy says: “I have already flagged with the Department of Transport the potential use some of this money to help generate new business in our regional airports and main sea ports, while still complying with EU State Aid rules.”
He added that regional requirements in the areas of broadband, seafood processing and advance infrastructure for industry would also make good use of some of this catalyst funding.
Deputy John Deasy has told the Dáil of a 74% year-on-year increase in passenger numbers at Waterford Airport up to the end of May.
The Fine Gael TD acknowledged “the past few years have been a struggle for everyone involved, but it is fair to say that the work and patience displayed by everyone involved is paying off.”
Mr Deasy said: “I hope the figures supplied to me in respect of the first five months of this year represent a turning point. They go to show that a focused regional airport investment strategy can work and makes smart business sense.”
Flybe operates two commercial routes from Waterford — Birmingham and Manchester. Together they showed a 74% increase in passenger traffic in the first five months of this year compared with the same period in 2013, amounting to more than 12,000 individual inbound and outbound flights.
“For the life of me, I could never understand why barely a penny was invested in Waterford Airport in the years when we had money to spend on infrastructure. There were plenty of announcements by sitting ministers, but nothing happened.”
Deputy Deasy attributed this continuing “substantial increase” in passenger loads — “albeit from a very small base” — to “good marketing, an uplift in the UK economy and a determination on the part of the Minister, the Department, airport management and everyone involved to make this work.
“It is working. Slowly but surely, Waterford is proving business can be found if an airport sticks at it.”
However, he said, “This is not to say that there are no unresolved issues. Money is being raised on the ground to supplement a Government investment that I hope will continue.
“The planning process for the runway extension is nearing completion and an arbitration process will proceed within the coming months, all of which should amount to an additional 200–250m of runway.”
Also, “Talks are continuing with commercial operators regarding the restoration of the Waterford-London route” — and the verified success of the current UK services should assist with this, he said.
While the region’s local authorities are “making the airport a priority and stepping up their involvement” as well, Deputy Deasy cited the Government’s “imagination to see the possibilities and to invest in critical infrastructure when times are tough” as “the key factor.”
By contrast, while he was “not going to bash” the previous administration, “for the life of me, I could never understand why barely a penny was invested in Waterford Regional Airport in the years when we had money to spend on infrastructure. There were plenty of announcements by sitting ministers, but nothing happened.”
Deputy Deasy agreed that “When a recession bites it is even more important that a government spends its money wisely.” But the passenger growth achieved this year “demonstrates that additional capital and operational funding for Waterford and the other regional airports is smart business and is a positive for the country's economy as a whole.”
Focus new stimulus package and IDA staff on most-deprived regions
Fine Gael TD John Deasy has told the Dáil that the new Ireland Strategic Investment Fund must be aimed at areas worst affected by, not just the recession, but “our evolving two-tier recovery.”
During statements on the Government’s priorities for the year ahead, the Waterford deputy warned that “undue political influence” mustn’t prevent an objective share-out of the €6.8billion stimulus package. “It cannot end up being a political pie, gobbled up by insecure politicians with one eye on a general election,” he said.
Mr Deasy declared that after three years in office, the Government’s strategy to spread jobs to the regions clearly “has not worked ... I have concluded that as long as the headline figures for the country as a whole are positive, the virtual non-existence of regional investment is considered irrelevant. There is almost a sense of resignation about the fact that so much investment – 82% – goes to Cork, Dublin and Galway and so little goes elsewhere.”
Of the 2014 Action Plan for Jobs, other than plans for a few advance manufacturing facilities (one in Waterford), he’d “heard it all before.”
In Waterford, where the unemployment rate remains at around 20%, “a downward trend is still being experienced,” he said. Any improvement in the Live Register figures needed to be seen in the context of the huge number of jobs hemorrhaged locally over the last six years, including multiple business and industry closures in the past 12 months.
Mr Deasy put forward “two specific suggestions” to address the growing geographical disparity in terms of job creation. The first being the new strategic fund, which, matched with private sector investment, could provide a national economic injection of €12–15bn.
“This is the only show in town. It is the only stimulus package the country will see for the next five or six years,” he said, insisting it “must be predominantly and proportionately invested in those parts of the country which have seen the least investment over the last ten to 15 years.”
Given the key aim of “isolating the fund from political interference”, the FG deputy insisted that policy and legislation “must guard against base political tendencies influencing how the stimulus package is divided up.”
Though focusing it on deprived regions is “reasonable logic”, he predicted it “will not make sense to some politicians who see an election on the horizon and a potential lump of money for their own constituencies.”
On the other hand, targeting areas where the economic indicators of decline are at their highest should make sense “to any government which is interested in balanced regional development.”
Mr Deasy sees the new Regional Aid guidelines for 2014–20, which are due to be published by the European Commission in July, as the ideal framework for distributing the ISIF investment.
If moves to direct aid towards those areas that need it most are not considered in forthcoming legislation governing the fund, “I will attempt to amend the Bill at the very least to highlight the scenario I have just painted,” he said.
Given there are “people at the most senior level in the IDA who believe the policy designed to attract foreign direct investment evenly across the State has failed miserably and must be re-engineered immediately”, Deputy Deasy’s second solution focused on the recent authorisation of 35 additional IDA staff.
With Waterford a notable, negative exception in terms of net IDA job creation among Irish cities last year, he looked at where the agency’s existing staff are based — including five in Waterford, 36 in Athlone, and 148 in Dublin.
Deploying the new staff coming on stream into those parts worst affected by the recession and which have seen the least amount of FDI, would be “a good start” in terms of prioritising recovery in the country as a whole, he said.