Irish structural projects to get EU grant aid

The inclusion of expensive infrastructural plans in a European priority list that will qualify for EU fund aid is likely to boost the State's public finances.

The future of the public finances is likely to be boosted today when the European Commission includes a number of expensive Irish infrastructural projects among those due to qualify for EU grant aid.

The European Commission is due to unveil a priority list of transport and research projects to be funded from next year as part of an ambitious plan to revive the bloc's sluggish growth, EU officials said yesterday.

These projects, which are understood to include rail and road links running from Cork to Belfast through Dublin, will be considered by the leaders of EU governments at a summit in Italy in December.

It is believed that the investments could attract grant aid equal to between 10 and 30 per cent of their cost, although no firm rules in this regard have been established.

News of any such financial injection would offer a timely boost for the Minister for Finance, Mr McCreevy, as he estimates the future state of the Irish Exchequer as part of this year's Budget calculations.

Sources said the so-called "quickstart" list is also likely to provide for the development of "motorways of the sea" that would link Ireland to various parts in mainland Europe.

This investment, which would come over a longer timeframe than the road and rail projects, would involve the upgrading of port and marine information systems that govern the island's sea traffic.

This could, for example, lead to the enhancement of commercial marine links between the Republic and countries such as Spain or Belgium.

To qualify for inclusion on the list, projects should kick off between 2004 and 2006 and benefit from a mixture of EU funds, long-term loans from the European Investment Bank (EIB) and government funds to make them more attractive to private investors.

The EIB has already pledged €50 billion in loans for the transport projects, which will have the ultimate aim of increasing economic linkages across the EU as a whole.

The European Commission meanwhile pledged at an EU summit in mid-October to allocate €5 billion a year over the next seven years to the priority projects.

Also likely to feature on today's list are rail tunnels through the Alps, part of a planned cross-border railway between Turin and Lyon, and a high-speed train link between Madrid and Lisbon.

Neither of these projects was included in a draft list circulated in mid-October, which sparked criticism in some EU capitals and were added only after the governments concerned pledged to the Commission they would complete the projects.

Italy had vowed to block the list if it did not contain the Turin-Lyon link.

But one EU diplomat played down the importance of the list and expressed scepticism at the ability of governments to keep their promises.

"We should not overestimate the impact of the list. At an EU summit in Essen, Germany in 1994, 11 transport projects were endorsed.

"Since then, only three have been completed," the diplomat said. - (Additional reporting, Reuters)