Multi-annual budgeting will boost the roads project and improve railways, writes Tim O'Brien, Regional Development Correspondent

It would be hard to start building a motorway network without knowing whether you would have the money next year to continue it. But in effect that is what the Government had been asking of the National Roads Authority (NRA).

In 1998 the Roads Needs Study was about the most ambitious programme that could be dreamt up in the absence of any firm commitment to continued year-on-year investment. If it had been taken as the answer to our roads needs, it would have resulted in despair for road users. It envisaged upgrades to existing roads right across the State, with a necklace of small-town by-passes where they could be afforded.

The ability to take on a large project like the recently announced 42 km Portlaoise-Cullahill motorway in Co Laois could not really have been planned. It was not until the launch of the National Development Plan 2000 -2006, in December 1999, that anything representing a strategic vision of a motorway network was put in place.

The plan envisaged some €6.3 billion being spent on motorways to the Border and the provincial cities, over seven years. But while this allowed multi-annual funded work to begin, the authority was in the position of having to wait two to three months after budget day each year to announce which schemes it would be continuing over the year and how many of the new ones would be started.

The big difference caused by the commitment of the Minister for Finance, Mr McCreevy, to provide more than €7 billion over the next five years is demonstrated by the fact that over the next three months the NRA will publish its works programme for the next five years.

At the same time the authority is moving towards fixed-price contracts, another major plank in securing a certain outcome for the State's investment.

Multi-annual budgeting puts in place strategic financing. The Minister for Transport, Mr Brennan, told The Irish Times: "The difference is that when the NRA completes a big project its budget doesn't automatically drop back, they can begin a new big one."

There is also the not so small matter of negotiating with contractors in the certainty that there will be money there to complete the job, baring major upset. It is a guarantee that the contractor can rely on knowing he will not have to fold his Portacabins at the end of phase one.

Mr Peter Malone, chairman of the National Roads Authority, welcomed the decision to implement multi-annual funding, saying: "The scale of the commitment involving Exchequer funding of over €7 billion over the period 2004-2008, is a clear recognition of the importance of an efficient road transport system for the economy" and he immediately listed the schemes which would benefit.

Mr Malone identified the long- standing practice of the annual budgetary process as a "serious constraint" on the efficient delivery of the roads programme.

The uncertainty about funding levels was not conducive to the most effective management and roll-out of the programme, particularly given the unprecedented scale of activity set out in the National Development Plan, 2000-2006.

This led to the creation of a stop-go environment, reflected in the inconsistent levels of road construction activity in recent years which saw no new project starts in 2002 and commencement of just eight new projects in the current year.

Mr Malone said: "The traditional annual budgetary process has significantly inhibited the authority's efforts to strengthen programme management practices, our ability to plan ahead with confidence and our capacity to complete schemes to a pre-determined timetable. The authority has lobbied strongly for the abandonment of this out-dated approach and has pressed for the adoption of a multi-annual funding arrangement instead."

The authority, building on the new arrangements, will publish a multi-annual national roads programme early in 2004. This will be supplemented by private investment in Public Private Partnership schemes of more than €1 billion.

It also allowed Mr Brennan to call for a major acceleration of the building programmes for the roads to Galway and to Cork and say that he now expects the NRA "to better plan and implement ambitious projects and programmes with much greater effectiveness and with the emphasis on delivery and value for money".

Ironically the situation at Iarnrod Eireann has been quite different. Promised €1 billion in 1998 by the Government to renew the railway, the job had been progressing nicely but quietly in the certainty of multi-annual funding. The company described the money as only a "promise" but when a rumour went around that the €1 billion would be cut, executives were shocked.

But there were no cuts and the railway has been renewed. Much of this has been unseen as the money was concentrated on track and signalling, but this month the introduction of the new railcars has already led to dramatic increases in capacities and even the grumpiest rail passenger may notice that they are travelling in a new carriage.

The provision for the next five years is €2.3 billion which will ensure continued improvements and new carriages.

While cynics have pointed out that the company has been told to go out and borrow €500 million of this, it will be guaranteed and after all Iarnrod Eireann has an income from its activities disproportionate to that which will come from the roads network Public Private Partnerships.