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Waterways funding will count a lot in 2012

27th December 2011
Waterways funding will count a lot in 2012

The most important event of the inland waterways year occurred on 10 November 2011. It was the publication by the Department of Public Expenditure and Reform of the document Infrastructure and Capital Investment 2012–16

Medium Term Exchequer Framework
Waterways Ireland, and the aspects of the Irish waterways for which it is responsible, have done well in the last few years. WI itself acquired a large amount of new kit including workboats, vehicles and a headquarters building in Enniskillen. Harbours and waterways equipment and facilities have been extended and improved.

Waterways Ireland is a cross-border body. It gets 85% of its funding for current expenditure from Ireland and 15% from Northern Ireland. Capital projects are funded by the Government in whose jurisdiction they lie.

Until recently, the Government Department responsible for Waterways Ireland was the Department of Community, Equality and Gaeltacht Affairs. The 2010 Estimates allocated e8 million in capital funding to Waterways Ireland; in the 2011 Estimates, that was cut to e6 million. There was also a small cut in WI’s grant for current spending.

Departmental capital
spending to 2016
The document published on 10 November 2011, the Infrastructure and Capital Investment 2012–16: Medium Term Exchequer Framework, sets out the capital allocation to each Department for the years 2012 through 2016. It does not go into as much detail as the annual Estimates documents, but it does show the total capital allocation to the Department of Arts, Heritage and the Gaeltacht, which is now Waterways Ireland’s parent Department.

That Department has accumulated functions from a number of other Departments, which makes it impossible to compare the capital allocations with the Estimates documents for previous years. Accordingly, I asked the Department’s Press Office for a comparable figure for the capital allocation for the new Department for 2011; I was told that it was e61 million.

Waterways Ireland capital spending to 2016
That is how much the entire Department was allocated for capital spending in 2011; the e6 million given to Waterways Ireland would have come out of that. The Exchequer Framework does not say how much Waterways Ireland will get in the years 2012–2016, but it does give the Departmental totals: 2012 e44 million, 2013 e38 million, 2014 e36 million, 2015 e36 million, 2016 e36 million. So, by 2016, the Department’s annual capital spending will be 40% less than it is now.

For 2011 Waterways Ireland got roughly 10% of the department’s entire capital allocation. If the same proportion applies in future, WI’s capital allocation will go from e8 million in 2010 and e6 million in 2011 to e4.4 million in 2012 and e3.6 million in 2016: it will end up as less than half what it was in 2010.

However, at the time of writing, the allocation within the department had not been decided; as the Press Office said,
the Minister is currently prioritising his plans within the context of both this Capital Investment Programme and the forthcoming Budget.

It is, therefore, conceivable that Waterways Ireland’s capital budget could be cut by less than average. However, the statement of priorities in the Exchequer Framework makes such an outcome seem unlikely:

Capital expenditure in this area will focus in particular on supporting jobs in the film & TV sector and in the Gaeltacht. It will also seek to target investment in priority areas in the cultural and heritage sectors that can support cultural tourism as one of the most important elements of Ireland’s tourism product. Other investment will help to ensure continued implementation of EU Directives and support waterways development in the context of the implementation of the Good Friday/St Andrew’s Agreements.

The “EU Directives” bit means compensation to turf-cutters. Waterways, therefore get the lowest priority within the Department and will be competing against other influential clients.

The Ulster Canal
The other imponderable is what this means for the proposed reconstruction of a small section of the Ulster Canal. The canal formerly linked Lough Erne to Lough Neagh; after many years of discussions, the Irish Government got Northern Ireland’s agreement to reconstruct a section from the Erne to Clones. That agreement depended on the Irish Government’s paying the full cost, despite the fact that half of the waterway would be in Northern Ireland.

As far as I can see, the project would be a very poor investment of public money: there has been no cost-benefit analysis, the published figure for costs is unreliable, the suggested benefits are overstated and there is no evidence that the canal would ever reach Lough Neagh (or indeed get beyond Clones).

But the current issue is not whether the project should proceed but how it would be funded if it did. For some time, the Department of Community, Equality and Gaeltacht Affairs maintained that the sale of surplus Waterways Ireland property in Dublin would cover the costs. That seemed to be at odds with what the North-South Ministerial Council had been told, but in any event, the property crash put paid to the idea.

In July 2011, oral and written Dáil answers made it clear, for the first time, that no money had been “ring-fenced” for the project and that “funding was not included in any budget between 2008 to 2010.” Furthermore, “it was always the intention that the Ulster Canal project would be funded from the Waterways Ireland annual allocations, as agreed through the annual estimates processes in this jurisdiction.”

In October 2011, Waterways Ireland applied, in both jurisdictions, for planning permission for its Ulster Canal reconstruction. But given the pressure on capital allocations evident in the Exchequer Framework, it is hard to see where it will get an additional e35 million at any time before 2016. The Government seems to be reluctant to kill off the project, or even (as with the A5 road) to “postpone” it, but anyone thinking of investing in a waterways-related business near Clones would surely welcome some certainty about the project’s future.

Published in Brian Goggin Team

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