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Infrastructure sell off to fund Irish roads programme

IRELAND's GOVERNMENT said last week that it could privatise the Dublin Port Tunnel and the Republic's M1 motorway to raise funds for more road projects.

In a surprise move, Irish transport minister Seamus Brennan said he is considering plans to sell the two infrastructure elements to the arms length National Pension Reserve Fund (NPRF).

The fund invests state and public sector pensions. It could buy the assets and then recoup its outlay from tolls.

The Port Tunnel, due for completion in 2005, is designed to take port and freight traffic away from the congested city centre. It will link with the M1, the main road from Dublin to Belfast.

The plan would raise money for infrastructure projects and provide a more attractive investment strategy for its public sector pension fund.

The fund is looking for stable investment options as global financial markets go through a period of weakness.

High construction inflation has doubled the cost of an ambitious road programme due to cost £4.2bn between 2000 and 2006 (NCE 12 December 2002).

A sudden decline in the Irish state finances in 2001 slowed the programme down. There were no new starts in 2002 although more have begun this year.

A spokeswoman for Ireland's Department of Transport told NCE that it was estimated that the port tunnel could fetch between Euro 1bn and Euro £2bn (£720M to £1.4bn).

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