Sale of state's AIB shares to go to infrastructure?

Zebra3

Talk on RTE news now (seems to have been on a few sites over last couple of days) that the government is looking to sell a 25% stake in AIB which could raise close to 3bn euro.

EU rules state that any proceeds must go towards debt repayments but there seems to be a push for the rule to be changed to allow state investment in infrastructure.

Hmmm...

Sam Russell

If that got the OK from Brussels, then the €3bn could go towards MN and DU, plus Dart extension to Maynooth. Of course that would cost more than €3bn but that is just 25%, there is the other 72% (or so) they own that could pay for the rest. It could also go towards the M20.

Wow, why did Noonan not think of that?

Bray Head

How could Ireland unilaterally change an EU rule?

Anyway, as I have posted before, there is nothing stopping the goverment from funding DU and MN tomorrow. It just has to spend less on public service wages or social transfers, or else raise taxes. 

The policy levers are there. They are simply not being pulled by politicians.

marno21

The main issue is the lack of ready to go projects, and the fact that we have one big ticket project ready to go that's being comprehensively redesigned for no apparent reason.

Here's the current situation on the roads side, listed in how ready to go all our projects are:

M7 upgrade* [tenders received]
N8/N25/N40 Dunkettle Interchange* [out to tender]
N56 Dungloe-Glenties* [Phase III tender expected 2017]
N56 Mountcharles-Inver* [Phase I tender expected 2017]
N59 Moycullen BP* [ready for tender]
N4 Collooney-Castlebaldwin* [advance works]
N5 Westport-Turlough* [advance works]
N22 Macroom-Ballyvourney* [advance works]
N52 Ardee bypass [advance works]
M28 Cork-Ringaskiddy* [planning decision pending]
N69 Listowel bypass [planning decision pending]
N6 Galway bypass* [ABP submission imminent]
N5 Ballaghaderreen-Scramoge [ABP submission imminent]
N21 Limerick-Foynes* [planning]
N2 Slane bypass* [planning]
N78 Athy distributor road* [planning]
N72 Mallow relief road* [planning]
M11/M50 Sandyford-Bray-Ashford [planning]
M4 Lucan-Kilcock [pre-planning]
M7 Redcow-Naas [pre-planning]
N13/N56 Letterkenny Northern bypass [pre-planning]
N14 Letterkenny-Lifford [pre-planning]
N15 Ballybofey bypass [pre-planning]
M20 Cork-Limerick [pre-planning]

There are also 2 sections on the western seaboard, N59 Westport-Mulranny and N86 Tralee-Dingle that have small parts under construction and the rest in planning.

(projects marked with * are part of the Capital Plan 2016-2022)

As you can see money allocated here will do little bar accelerate the planning phase, which has a long way to go. The only thing I'd like to see is projects on the N17, N21, N24 etc and brought to the shovel ready stage. Most projects above won't be ready to go this side of 2021.

Sierra Oscar

Bray Head wrote: »

How could Ireland unilaterally change an EU rule?

Anyway, as I have posted before, there is nothing stopping the goverment from funding DU and MN tomorrow. It just has to spend less on public service wages or social transfers, or else raise taxes. 

Public service / civil service wages can't just be changed arbitrarily overnight.

The Government needs to look at securing money from the European Investment Bank for the construction of new infrastructure. This option has been on the table for the last few years but the Government has simply refused to explore it. The Taoiseach's former Economic Advisor Andrew McDowell recently took up a post as VP of the EIB and has been pushing the Government to explore the possibility of securing €Bn's from the fund for infrastructure.

marno21

Sierra Oscar wrote: »

Public service / civil service wages can't just be changed arbitrarily overnight.

The Government needs to look at securing money from the European Investment Bank for the construction of new infrastructure. This option has been on the table for the last few years but the Government has simply refused to explore it. The Taoiseach's former Economic Advisor Andrew McDowell recently took up a post as VP of the EIB and has been pushing the Government to explore the possibility of securing €Bn's from the fund for infrastructure.

Indeed. He met with the Finance Committee last week, here's what was said for anyone interested:

https://www.kildarestreet.com/committees/?id=2017-05-04a.2340

LeinsterDub

EU says No
http://www.irishexaminer.com/business/eu-no-room-for-large-rise-in-budget-spending-450682.html

Sam Russell

LeinsterDub wrote: »

EU says No
http://www.irishexaminer.com/business/eu-no-room-for-large-rise-in-budget-spending-450682.html

Then they should hold the shares until the computer EU says yes.

The shares will be a better investment that paying down debt.

Bray Head

Sam Russell wrote: »

The shares will be a better investment that paying down debt.

How do you know?

man98

Bray Head wrote: »

How do you know?

Well they paid a dividend of €250M last year, as well as a reassurance of a body I'd like to think of as being competent in control of a bank for a change. However, there remains a large degree of risk with volatile bank shares. Now if we could turn the dividend into infrastructural investment and AIB don't go down the tubes that would certainly earn its weight in gold over time. Then again, I'm no insider.

Atlantic Dawn

With the €13 billion Apple money could that be used for infrastructure or are EU rules against that too?

Sam Russell

Bray Head wrote: »

How do you know?

Well, if they were not, Noonan would be selling all of them, not just 25%.

We do not need to sell any if all the proceeds go to pay down debt.

LeinsterDub

Atlantic Dawn wrote: »

With the €13 billion Apple money could that be used for infrastructure or are EU rules against that too?

All windfalls must be used to pay off debt.

Bray Head

man98 wrote: »

Bray Head wrote: »

How do you know?

Well they paid a dividend of €250M last year, as well as a reassurance of a body I'd like to think of as being competent in control of a bank for a change. However, there remains a large degree of risk with volatile bank shares. Now if we could turn the dividend into infrastructural investment and AIB don't go down the tubes that would certainly earn its weight in gold over time. Then again, I'm no insider.

You could have made a very good case that they were a great deal in 2006.

Should the state have piled in then?

Bray Head

man98 wrote: »

Bray Head wrote: »

How do you know?

Well they paid a dividend of €250M last year, as well as a reassurance of a body I'd like to think of as being competent in control of a bank for a change. However, there remains a large degree of risk with volatile bank shares. Now if we could turn the dividend into infrastructural investment and AIB don't go down the tubes that would certainly earn its weight in gold over time. Then again, I'm no insider.

You could have made a very good case that they were a great deal in 2006.

Should the state have piled in then?

murphaph

LeinsterDub wrote: »

All windfalls must be used to pay off debt.

Is it a windfall if the EU insists it should have been collected in the first place?

LeinsterDub

murphaph wrote: »

Is it a windfall if the EU insists it should have been collected in the first place?

Apparently so.

man98

Bray Head wrote: »

You could have made a very good case that they were a great deal in 2006.

Should the state have piled in then?

I wouldn't have bought the shares in the first place in that position, imagine how much infrastructure that could have funded... could be in flying cars right now :pac: