Capital Spending

Scaling back capital spending has been a central plank of the Government’s fiscal adjustment strategy.  Nominal voted capital spending is set to fall from €7.2 bl. in 2009, to €6.5 bl. this year, to a planned €5.5 bl. in 2011.  However, based on an examination of the project pipeline, the Construction Industry Federation believes that the procyclical cutback in spending will be considerably more severe, and conclude that “the Government’s ability to achieve its own spending targets in 2011 and 2012 is now in serious question”.

The Taoiseach defended his Government’s capital spending plans at the IBEC President’s Dinner last evening.   In response, it is interesting to see both Lee Crawford, the incoming IBEC president, and David Begg argue vigorously for more protection of capital spending in side–by-side opinion pieces in today’s Irish Times.   Unfortunately, in arguing for investment to support domestic demand, neither addresses the likelihood of a national creditworthiness/domestic demand trade off.    This is just as limited a view as held by those who focus only on bond market constraints and ignore the demand implications of austerity plans. 

I hope there will be more debate on the appropriate current-capital mix of adjustment measures in the coming months — though I can’t say I’m optimistic.   It would be a pity if we end up following the path of least political resistance. 

45 replies on “Capital Spending”

“a national creditworthiness/domestic demand trade off”

I’m not 100% sure I understand you, but I’ll assume (in good economics fashion) you mean that if we increase domestic demand it will reduce national creditworthiness.

If we invest in productive infrastructure, that provides a return, this should not reduce our credit worthiness. Our ability to repay debt will increase. In contrast if we put resources into something non-productive, like scrapping cars, this probably does reduce it.

Also, suppose we have some projects that must be done sometime over the next 10 years, like building schools. In a way our use of prefabs is a liability. By building proper schools we eliminate this liability and the liability that it is politically necessary that the prefabs are replaced (and gain a liability in terms of national debt). Building the school now can be a net gain as we can build the school a lot cheaper now than waiting 10 years (as now we have lots of construction workers on the dole, so their marginal labour cost for a govt building project would be their wage bill less dole payment). So we replace the implicit liability of the necessity to build school in the future with a smaller, though explicit, liability in terms of national debt.

Rory,

I was a bit cryptic on that score.

I do think that a larger discretionary deficit is likely to decrease our creditworthiness. But the nature of the trade off is likely to depend on the mix of the fiscal adjustment. Today’s capital spending cut does not represent a permanent reduction in spending as you note, and so does not improve the long-run fiscal position in the same way as a cut in current spending or an increase in taxes. It also builds the supply potential of the economy. For this reason, I think there is a smaller creditworthiness bang for the deflationary buck.

@ RO’F,

An interesting one in a BBC documentary about the financial services industry in Britain, was the tax take from the high earners in Canary Wharf paid for the Gordon Brown Labour government to roof almost all the schools in Britian. Many of those schools had not seen any investment or maintenance since being built to begin with. It will be interesting in Ireland. It is one thing to build the schools and quite another to pay to maintain them. Designers frequently argue for better, more robust construction up front. I can tell you what though, some larger secondary schools built in Ireland during the 1970s, using ‘fast build’ techniques might be coming to their sell-by date. Similarly with universities. We do see quite a progressive building program happening at UCD etc nowadays. BOH.

Surely, prior to any future capital contract there should be a review of costs:

Regulations- do we still have Celtic Tiger regulation that needs to be looked at? What percentage cost of a project involves interactions with government, be it agencies or regulations?

Property, land etc- Does it make sense that any capital projects take advantage of the lower land costs at present? Would it make sense to move projects of a locational nature if costs can be reduced?

Professional services: All new contracts to work on a lower unit price. Where this maybe difficult, current % costs can be worked out and a reasonable reduction imposed.

Labour: Can there be a negogiated reduction in labour costs? If not, should there be one imposed.

If the above can be implemented, we could get more done, by more people for less.

‘…In response, it is interesting to see both Lee Crawford, the incoming IBEC president, and David Begg argue vigorously for more protection of capital spending …’.

Yes indeed for IBEC and ICTU are coming from such entrenched and diametrically opposed ideologies that to see them agree on anything is extraordinary. It’s like F. A. Hayek and Karl Marx sitting down for a beer.

This is just a D of F “bookeeping ” exercise. This Bunch of Wasters who should be fired for financial incompetence worse than the Bankers are now just protecting their own positions in the system to the point where once again we will have no credible infrastructure and what is currently there will go into meltdown. Look at the new motorways already most of them are filthy and when parts are broken on them not fixed. It is time that these people are made responsible for their actions/inactions with their jobs and fat pensions on the line. The rest of the Private Sector are paying for these incompetents with their jobs, businesses, homes and pensions.

On David Begg’s statement that “Every €1 million spent on infrastructure can create eight to 12 jobs”, I think it is fair to say that €1m is sufficient to employ 8 to 12 construction workers for one year. Another €1m will then be required to create the jobs again the next year, a further €1m the following year, and so forth. I believe the basic maths are that construction labour costs are somewhat over €40k per annum, and, once other costs such as materials are added, the cost of construction projects works out at about €100k per worker employed per annum.

@Con

When you spend on infrastructure there is some chance that the people you take off the dole are less likely to be involved in crime and other unsocial behaviour. It costs €150 K a year to keep a person in our jail system.

@TRP, on a point of pernickety detail, the Irish Times reported yesterday that the average cost of keeping someone in prison for a year had dropped to €77,222 in 2009.

There are many good reasons for creating jobs, and keeping people out of jail is one. I think more clarity on what people mean when they talk about job creation numbers would often be helpful in pursuing this goal.

@ Con

I don’t know what David Begg was referring to, but it could well be 8-12 jobs in the construction phase.

There should still be some long term jobs. Eg for the Luas you have the drivers (direct jobs) plus the fact that Dublin is more competitive with a tram system which indirectly helps attract FDI, tourism and so on.

@Rory,
I’m fairly confident that he was talking about the construction phase, and that he meant jobs per €m per annum, because it’s the most obvious way in which the numbers add up, and because there are many other people in Ireland and internationally who use much the same terminology. There are also, however, many other definitions of job creation in common use.

The long term net impact on jobs may be positive, neutral or negative. Many investments have little or no ongoing employment associated with them, and where they do have a net ongoing employment impact it is typically a small fraction of that in the construction phase. My guess is that the net jobs impact of LUAS is positive, although one should ideally take account of factors such as jobs displaced from the bus system and the long term jobs impact of the costs associated with debt servicing in a calculation.

@Al – “If the above can be implemented, we could get more done, by more people for less.”

It’s already being done. They are called ‘unpaid interns’ and I see more and more ads for them every day as the summer progresses. A cynical abuse of young people who are desperate for a job.

“If only it was 8-12 jobs from every milion spent in NAMA……”

That is funny. The only jobs NAMA is going to protect are those of the various so-called ‘professionals’ who I believe have a big fees budget allocated to them over the next 10 years in NAMA.

@TRP – “people you take off the dole are less likely to be involved in crime and other unsocial behaviour” … you really should choose your words more carefully. I know lots of people recently put on the dole who have never been involved in crime or unsocial behaviour and are not likely to be. In fact, I would say that accounted for 100% of the people I know on the dole.

Sounds like you have the answer though. Tip all the prisoners out of jail and make them work for free (h’mmm… brings a whole new meaning to that word ‘intern’) and you get the infrastructure cheaply plus a saving of €77,222 for each prisoner.

@ Con,

I think it is fair to say that €1m is sufficient to employ 8 to 12 construction workers for one year. Another €1m will then be required to create the jobs again the next year, a further €1m the following year, and so forth.

Al in his comment above mentions professional services to be provided on government infrastructural projects. I know it is a fact, from my own knowledge of these professional services, that to keep a handful of those jobs in a small company going, you need to have millions and millions worth of construction each year. It is frightening, when you work out those ratios. The managing directors of engineering, design and construction firms spend the vast bulk of their time in a panic, they might not find enough of construction work, to pay salaries of their employees. When we talk about infrastructural projects and construction jobs, I often wonder what that means. Because the construction jobs are the thin end of the wedge. It is the vast amount of professional services, and indeed communications back and forth between government departments and bodies, which is where the money gets spent. I have often chatted to people who had careers in local authorities, and they reckon that for each m2 of motorway tarmac laid, there might have been 2 or 3m2 of paper correspondance and drawings produced. Quite literally.

Pat Kenny on his radio show interviewed a director of an engineering consultancy not so long ago. The issue was, that to even provide the paperwork required for tendering – the engineer didn’t win any work at all – it cost €100k. In other words, the price of two recently graduated professional salaries for a year. That was only to produce the paperwork to be considered for competition to get the work. The costs of administration and communication goes up from there, once you get into final bidding and project execution stages. It is a widespread problem in this country I believe, our inability to plan and execute projects within a reasonable budget. But I do take Al’s points about costs of labour, land and so forth, which also input into it. The cost of land for the LUAS infrastructure being a prime example, where people owning ransom strips obtained valuations for the same land, which suggested 100 storey hotels etc, should be built on the site to make it viable.

Can I add, while I am here. It was a major reason why the business models of the property developers in Ireland collapsed – because their expertise was mainly in dealing with the problem of exorbitant land costs. The land costs overshadowed all of the other costs during the boom years. We had no incentive to get efficient, because construction management and services costs represented such a small portion of the overall equation. BOH.

@ John McHale,

The whole reason we are rescuing the likes of Carroll, McNamara, Dunne and others is for the simple reason, they had been panicked by the sudden spike in land values. In other words, the attention and the focus of their organisation and their companions, the lenders was aimed towards solving their issue of land, as a raw material. That was the ace in the deck that everyone needed to have. Once you had that you were made up. I remember as the second phase of the Celtic Tiger entered its ‘white hot’ stages in 2006/07, the amount of financed provided for design and engineering services became less and less. The participants in the building industry invested more and more of their time, and hiring capacity into acquiring financial types who could handle complex land deals and arrangements. It is ironic now, that having emphasised that side of their business so strongly, it all backfired in spectacular fashion. Companies and individuals who had done extremely well from 15 years of prosperity in Ireland, suddenly found themselves without any enterprise at all. It is something I will never understand, as long as I live. BOH.

John

It seems to me that the composition of fiscal adjustment affects the necessary scale, in terms of maintaining/improving credit worthiness. To have the same impact on credit worthiness, is it not the case that a fiscal tightening weighted towards cuts in capital investment and tax increases (as has been the trend to date) will have to be greater than one weighted towards cuts in current spending?

In March, Richard Bruton suggested that a €2 billion cut in current spending, with any revenues from tax broadening recycled back into cuts in taxes on employment, would be more politically difficult but should give Ireland the necessary fiscal space and credibility to delay further cuts in the capital programme and protect more jobs. Admittedly, he proposed this before the sovereign debt crisis, but the logic still applies.

Andrew

@ R O’F
Running costs should be considered, not just initial capital outlay. Meeting targeted running costs should be part of the contract.

@ R O’F
Running costs as in heating, lighting, digging up roads to lay future pipes, maintenance, etc.

Incentives are needed for ensuring long-term thinking in infrastructure costs, whether schools, roads etc. Don’t see much evidence of this in Ireland.

The book “Natural Capitalism” shows eloquently how including several energy-saving efficiencies–when combined–can result in a building with little or no additional capital cost, because of savings in running costs.

Ditto for effective planning. (Better long-term planning might have helped avoid/reduce prison population by having better community infrastructure. But that’s another story.)

Andrew,

You ask an important question. I did think initially that a budgetary package weighted towards current expenditure cuts and relatively non-distorting tax increases could allow a more backloaded adjustment overall. I now think it is best to stick with the government’s plan for 3 billion euro fin 2011 followed by a similar adjustment in 2012 . My thinking has changed for two reaons: First, the broader eurozone crisis has effectively shifted the tradeoff as you noted. And second, the government’s credibility is by now firmly attached to its announced timeline; there would be a significant cost in terms of creditworthiness to abandon it now. However, I still believe that the mix matters in terms of what affects hitting the overall target has on bond spreads and the speed of recovery.

I should admit that I was mildly critical of Fine Gael in the run up to the budget for keeping to the government’s overall deficit target, althouhgh clearly offering a different mix. The reality did not seem to match the rhetoric of a significantly different approach. As I noted, I have now come around more to seeing the wisdom of this approach. Based on what you wrote, it is interesting that Fine Gael may have since moved somewhat in the direction of a more backloaded adjustment.

@ Joseph

With regard to ‘unpaid internships’ etc…

I would have to point out that in our recent history we have regulated ‘work’ to a moralistic level similar to marriage etc all those years ago,

An employer seemingly has to ‘marry’ a worker nowadays!!

In terms of rights, duty of care, etc the cost of facilitating work nowadays needs to be looked at.

Workers are of course better off now!, but, how many people are working?

@ Andrew McDowell,

Your point is very well made, and is particularly relevant from the point of view of smaller enterprises and the environment they have to exist within. I will pick up on Brian Lucey’s comments he made on morning Ireland radio the other day – that it should be possible to include economists on the staff of all major departments in Ireland today. There are implications arising out of the general trend of policy as dictated by government, for any specific branch of the permanent government. It would be helpful if economists were distributed widely between the different branches of permanent government, to record how general policy direction shifts do affect the individual branches. Say, if you had a couple of economists working in the department for entreprise, trade and employment – say one concentrated on small to medium scale, and others looking at the larger picture. They would be able to process information into a publish-able format, that could be used as reference material for a wider community of academic, public servant and other professional economists.

What I notice with economics as a profession in Ireland, is that much of the activity is driven by economists working in the academic or semi-academic side of it. Okay, you have guys like Ronan Lyons approaching it from a specific industry, and possibly more I am not familiar with. Brian Lucey used the example in his radio interview, of the OPW without engineers and architects. I have been turning over another analogy in my mind for the past day, and I think it fits. Not having economists in the various branches of permanent government, is like not having a weather forecast each evening at 6.00PM. One of the most crucial things in the early birth of the Irish nation, from the point of view of sea vessels, agriculture and ordinary people, was the weather forecasting service. Not having economists working and integrated into the various branches of permanent government in Ireland, is like being blind without the use of weather imaging satellites to try and forecast. As John Waters the journalist said of his days in pirate radio, the weather forecasting consisted of looking out the window. That is where we are with economics unfortunately, and there is no urgency about this matter. You can sense it in the soundbytes that PrimeTime plays all the time now. Noone could see this coming. No one was to blame. Irish banks are extremely well capitalised, etc, etc. BOH.

Least political resistance is always what will determine policy …..

Ireland deserves to continue to squander what many have sacrificed a great deal for. Keep it up! From peasants, back to peasants!

Peasants always over value land!

Building schools is an example of the smart economy!

Broad band means we do not need schools!!!!

But peasants find it difficult to decide …. Land is always valuable, so let’s build!

There are smart peasants and there are moronic peasants ….. In times of famine, do we eat the seed corn or plant it?

When a peasant builds a road he steals what he can. He buils cheaply and says that the potholes are a source of wealth as he is paid every year to fill them in.

The concrete autobahns are still good though built in the thirties in Germany. I am amzed at the cute hoors in CRH that they have not paved Ireland with concrete. Guess they got more money adopting other methods!

Australia has been gently exterminating the “first Australians” for decades. We used to shoot them when they “stole” our cattle or sheep. Then we stole their children and put them into concentration camps (run by caring nuns and brothers……… ) now we give them social welfare money and discourage “people” from supplying them with alcohol.

Social welfare is the best way to exterminate people. After a few years they are unbiddable and do not make good slaves. Their minds are damagesdand their bodies are damaged by cheap food and drink. Crime is what others do not want you to do. Drinking in public. Doomadgee did that on Palm Island. So he was taken into custody where it has been judicially found that the sergeant split his liver with his knee. He says it was accidental, but the police who investigated are now under investigation for failing to investigate and fraternizing with the sergeant. Oh the ni**er? He died and his family and friends rioted. But he wasn’t human. His behaviour! He was always drinking. And swearing! That is how we deal with undesirables in Australia.

Solve the unemployment problem by dropping the price of alcohol. Drugs don’t kill them as fast ……. they also allow the clever to get rich.

Peasant society? Pleasant for many?

John

You write that “the government’s credibility is by now firmly attached to its announced timeline; there would be a significant cost in terms of creditworthiness to abandon it now.”

But as Martin Wolf writes in today’s FT, “The drawback of arguments based on credibility is that they are vaporous, if not self-fulfilling: tell investors that credibility is at stake and it soon will be.”

Andrew

@John Mc Hale – I had intended posting on this too but dit not get around to it.

I have given my views on the scale of capital expenditure before – we should spend as much as we can afford given the fact that there are still infrastructure deficits but obviously we can afford much less than before.

The much bigger issue to my mind is where the cuts take place. The government annnounced that they will cut capital expenditure by a further billion in the next budget – which billion is going to be cut??? Education, roads, public transport, health, water….which capital budgets should be cut? Cutting the wrong billion could be very costly.

One method popular among politicians is the apply the cuts equally across all areas – what I call a lawnmower approach. From an economic point of view this is the worst approach to take as areas where money is being wasted retain budgets while areas with huge returns are also subject to cuts. The budget announcements suggest that this is not the model being followed – areas such as Foreign Affairs, Arts, Sports & Tourism and Justice have had to take a much larger cut the for exampel Enterprise, Trade and Employment and Education.

The Department of Finance apparently conducted a review of capital expenditure but nothing has been published, and I am not even sure if it has been approved by cabinet. I have argued many times before that we need to base our decisions on where to invest and where to cut on sound and transparent analysis.

I would worry that big mistakes are being made, not just because there is a lack of transparency but because the necessary analysis is not being carried out and huge deficiencies in the way infrastructure is managed (e.g. the lack of asset management systems that would be standard in the private sector). There tends to be too much of a focus on new build rather than maintenance and the current expenditure implications of investment are often ignored too (as OAC points out above).

For example we could build an additional hospital tomorrow, which is going to create x construction jobs, but we can’t open the hospital because there is a recruitment freeze – surely the return to such an investment is questionable. We could refurbish every school in the country – but do we need all these schools (are they in the right place), are we going to close some of them down for lack of pupils or should we rebuild a bigger school due to high future demand, do they need refurbishment??? In a time of severe budget constraint ensuring the efficient allocation of resources is more important than ever.

The one point that seems to be ignored in this discussion of the appropriate mix of capital and current expenditure reduction and revenue raising is the fact that the state has up to €15 billion of equity tied up in semi-state companies. Up to half this could be released relatively easily. It would replenish the NPRF, reduce the debt/GDP ratio, convey a clear signal to the markets and, assuming the fiscal stance on current expenditure and revenue were maintained, allow a more measured and growth-promoting stance to be adopted with regard to the capital budget. What appears to be under consideration for the semi-states falls well short of this and, as a result, is likely to fall well short of what could be achieved.

@ Edgar,


The much bigger issue to my mind is where the cuts take place. The government annnounced that they will cut capital expenditure by a further billion in the next budget – which billion is going to be cut??? Education, roads, public transport, health, water….which capital budgets should be cut? Cutting the wrong billion could be very costly.

It is often debated over what is the difference between policy documents of various political parties. Perhaps it is no great surprise, that many of the documents presented for capital investment by the various parties do mirror each other a lot. It is when you get into details and emphasis only, that differences can actually be found. I’ve listened to the Green party’s presentations about capital investment – a lot of them involve a serious amount of political maneuvre-ing. I mean, in terms of waste treatment, energy generation, water supply, communications – there is a whole complexity of things involved. Which supports my argument again, that much of the cost of doing any of these projects, will be taken up in the design development and feasibility stages.

The unfortunate thing from the point of view of many projects, is that when you get so far into them, and have invested a lot of resources already – even if the project is obviously flawed or limited in some respect, you tend to go ahead with it anyhow, rather than turn back. So it makes a lot of sense, to invest in the best, broadest, multi-perspective analysis and consultation from the beginning. The LUAS infrastructure and other capital investment programs might be interesting to look at, from this point of view. We are still taking about joining up the LUAS lines in 2010. Would it have been a lot more feasible to include that joining of the two lines in the original brief? Many projects such as the upgrading of medium voltage electrical infrastructure in Ireland was thought to be a manageable undertaking. But half ways through that investment process, it became obvious to those involved, they had undertaken much too large a block of work at the same time. It would be useful to capture the views of the people involved in those capital spending programs – there may be useful opinions, and input which could be included in the mix going forward. We have augmented our skills and sophistication in terms of capital investment program management in Ireland – but we were probably coming from a low base, and had to import experts to bring us into the 21st century. As it stands though, many of the private sector consultants and companies working in this area, have fallen into the same trap as most SME’s in Ireland. They were starved for investment and proper, good management during the years of the property boom. You can witness the evidence of this all over now, with NAMA, which is having to deal with inadequate documentation for projects and property investments, right, left and centre. Even high court judges have commented on this, from their inquiries. BOH.

@ All,

I is worth mentioning in this discussion, the National Development Plan logo appears in all sorts of places, apart from signage announcing the arrival of another new motorway or by-pass project. Student grant aid being one particular example. I notice Edgar above has included ‘education’ in his list, but just to elaborate on that some. Education I guess can be considered as much a part of our critical national infrastructure as the roads intended to ship produce around on the back of artic lorries. BOH.

@Paul Hunt – “the fact that the state has up to €15 billion of equity tied up in semi-state companies” – indeed, and one has to ask whether there is a rationale for holding on to them. A proper debate on this would be very useful. Furthermore, the issue of charging for certain services, e.g. water, can’t be ignored any more either – it is daft to be providing infrastructure for excess demand that could be dealt with by putting the right incentives in place.

@Paul Hunt – “is the fact that the state has up to €15 billion of equity tied up in semi-state companies”

Imagine you owned these companies. Surely, if you believe there is going to be a ‘recovery’ (as our dear leaders like to tell us) then you wouldn’t want to sell those assets now, at a low point? You would wait for the recovery and sell them at a better price? If they were sold at a low point, that would have to send out a pretty alarming message about the government’s actual confidence in the prospects of a recovery.

@ BOH
You are making big sweeping statements there about SMEs and Private Sector managers etc. In case you dont know it this economy is still in existence mainly because of the guile of SME managers who get damn all assistance from the State. In fact all SMEs get is hassle from the Quangos, Revenue and related hangeron entities looking for information to keep their pens in ink. You need a period working in the Private Sector as a owner/manager to see what it is like out there in the real economy. The Banks and Nama documentation or the lack of it has everything to do with Large Corporate greed and nothing to do with SME management capabilities. In fact SMEs were ignored by the Banks in the period from 1999 to 2008 because they were so busy servicing the Property sector.

@Joseph,

Your objection makes sense if these businesses were cyclical. Network and infrastructure businesses aren’t and Irish sector regulators have a strong track record for allowing (and, in effect, guaranteeing) excessively high cash flows. There is a lot of “good money” (e.g., pension and insurance funds) looking for a better home than dodgy sov and bank bonds. Where better to invest than in safely regulated network businesses? Investors will buy on the basis of future regulated returns and investment recovery.

It seems all one has to do is mention “Eircom” and/or “firesale” (or “ESB Group of Unions”) and normally sensible people take fright.

@Edgar,

Apologies for the double-post. I agree, but we’ve been around the houses on this before without provoking any meaningful response. Press reports indicate that some limited measure of privatisation is being considered by the DoF, but the usual lack of transparency and secrecy is operating. I expect, in due course, some totally half-arsed, well-spun, fait accompli will emerge for rubber-stamping by the Oireachtas. It appears that the sale of the supply businesses of the ESB and BGE is being considered – among some other odds and sods – which have the lowest and most uncertain net value. It seems network assets, where the bulk of the value resides, will remain in public ownership for reasons that would not sustain even the minimum of objective scrutiny.

As regards water charges, it is likely that the focus will be on an “equitable” revenue raising exercise that will bear no relationship to the costs being incurred – or those that could be avoided.

All these areas are calling out for an objective, genuinely disinterested assessment that would inform policy. Significant macro and microeconomic benefits could be reaped, but it appears there is no interest among those who have the resources, competence and credibility to conduct such an assessment.

@ TRP,

In case you dont know it this economy is still in existence mainly because of the guile of SME managers who get damn all assistance from the State.

I do agree with everything you say. But please, don’t let us get into this debate about SME’s versus the entire galaxy. That is not the way it should be, that is not the way it needs to be. The major reason that bankers haven’t serviced SME’s up until now, is that someone at highest management level in the banks, didn’t see it fit to introduce their general staff to the concepts behind SME’s. Obviously someone at senior executive management in the Irish banks, and possibly external influence outside of the banks (bank shareholders included?) made a value judgement, that general staff in banks would not be incentivised through promotion and what-not, to go and learn properly about SME’s and opportunities they presented for Ireland’s economy.

Thanks for the input. BOH.

Not all capital expenditure is created equal. The question is not so much ‘Should we invest in capital projects?’ as ‘What is the appropriate level of investment to meet our projected future needs and how do we maximise this investment?’

One example of a capex project proposal which is focused on meeting needs and maximising return is the BRT project proposed by Leahy and Venetikidis – http://www.venetikidis.com/aris/Dublin-Transport_MA.html . This project shows how a series of relatively small civil engineering measures, coupled with a rethink of public transport in the city, could produce a complete turnaround in the way people get around our capital city.

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