Ireland should put aside a rainy-day fund for big projects
One of Ireland’s leading project managers says we need look at an infrastructure ‘war chest’.
IRELAND COULD FOLLOW other countries’ lead and set aside some money while the economy is performing well that can be invested in infrastructure in the case of a downturn.
Pat Lucey, one of the country’s most senior project managers, said that the proposed fund could be used to smooth out spending and mitigate against boom and bust cycles.
Several figures, including Ibec CEO Danny McCoy, have argued that the government should look to take on large loans now, while borrowing costs for the state are at near-record lows, to fund future large-scale infrastructure projects.
War chest
Lucey, who is vice president of the Irish chapter of the Project Management Institute (PMI), said the country should follow successful models used in other countries.
Speaking to Fora at the PMI’s national conference earlier today, he said:
“In some of the Australian states they hoard up a war chest and then when the private sector slumps that’s when they do big infrastructure builds so they use it as a way of leveling out the peaks and troughs and you get better value during those times.”
“You need to have the right circumstances to set aside that war chest in the first place but I think ideally it is a sensible way to go.”
Lucey, who is also the chief executive of Cork-based enterprise technology company Aspira, added that building up a fund could help keep spending consistent and ensure that work on crucial infrastructure still takes place during any downturn.
“We have a concept in project management called resource levelling which is rather than have 100 people working on a project for a few months and then have 10 people, instead you move your projects around so that you can keep as level a number as you can,” he said. “I think that principle applies.”
Pat Lucey
Lower costs
PMI Ireland president Niall Murphy agreed the suggested fund could be cost-effective, although he warned on the practicalities of setting money aside.
“If you do choose the leaner years (to invest) you should get more bang for your buck, you would imagine you would have more competition and keener pricing,” he said.
“(But) it’s easier than done. Once there is a perceived pot of money somewhere there are lots of ways to spend it.”
Niall Murphy, left, at the PMI Ireland conference today
Lucey added: “It’s like saying you should buy a house when it’s at a low price instead of a high price: yes you should, but it’s not always easy to do.”
“If I was given a couple of billion to spend now I’m not sure whether I’d keep it for a rainy day or go and build out infrastructure now. If you look at the likes of Saudi Arabia they’re putting away loads of money to develop alternative industries. If you can afford to do that you can make sense.”
