Off Book Accounting to Keep Europe Happy

D

daltonr

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I can't believe what I'm hearing for the last few weeks about Capital Spending in this Country.

They are trying again to build the National Conference center but to avoid borrowing (at very low rates) they are going to allow a private company to build it and then the government guarentee that they will lease the center from the Private Company.

We won't own it, and the return to the Private company will presumably be a lot higher than the measly interest rates that the government could borrow at.

Schools all over the country are renting Portacabins for as much as €10,000 a year each. One on 5 7 Live yesterday has 6 portacabins €60,000 a year. and it's been that way for a few years.

Toll roads are being paid for over and over and over again because we apparently CAN'T borrow for capital expenditure because that would screw up our Figures and make Europe unhappy.

Nobody told me that joining the Euro meant we had to adopt idiotic financial policies.

Am I missing something here? Is there some great economic
trick that they are using that I'm too stupid to understand?

-Rd
 
I think the proposal to build the National Conference Centre has more to do with guaranteeing income to Fianna Fail than anything else. This has most likely been put together by some loyal FF property developer (aren't they all?).

The IFSC was similar. Dermot Desmond dreamed up the IFSC to develop a high-rent office complex with an almost guaranteed supply of tenants who wanted to utilise the favourable tax structure.

John Ronan and Richard Barrett own the Treasury Building in Grand Canal Street, which is designated as part of the IFSC for tax purposes, in that the tenants of that building are entitled to avail of the IFSC tax benefits.

Ronan, Barrett, and Desmond are all major FF "fund raisers" i.e. contributors.

Who will get the contract to build the NCC? Watch this space.
 
Hi Spiderman - You did notice where the FF campaign headquarters for the last election was located, didn't you - see [broken link removed] for more details.

You scratch my back.....

But to get back to the original issue, to me it seems ludicrous that the state should have any role in building a national conference centre. If such a centre can't stand on it's feet commercially, then it shouldn't be built. Why should the state be getting involved?

I do recall some of the economist 'talking heads' warning about the restrictions that would result from entry to the euro system, but I don't specifically recall any of them mentioning the impacts of this restriction on borrowing.
 
"You did notice where the FF campaign headquarters for the last election was located, didn't you"

Indeed I did.

Where does the provision of this free office space show up as Election Expenditure, or as a Donation to the party? Nowhere, I suspect.
 
I understand Rainydays point that if the conference center can't stand on it's own two feet then the state shouldn't be involved in building it.

The counter argument is that the state would benefit from bringing in major conferences and a lot of that money would go into the surrounding economy, which might not go into the conference center itself. Also conference attendees are likely to return for a holiday if we show them a good time etc.
The economy as a whole might benefit even if the conference center loses money. In that context a state built conference center is a good investment.

Whether it's a FF thing or not doesn't really worry me as as much as the fact that nobody seems to care about the mad economics of the whole thing.

Isn't it self evident that for a long term piece of infrastructure like a Road, a School or a Conference Center, we'd be better off borrowing at the historically low interest rates, rather than renting our infrastructure from Private Companies at very high prices.

€10,000 a year to rent a portacabin? can this be right?
You can buy a really nice wooden house for not much more than that.

And to think teachers can only get their increases under Benchmarking subject to productivity increases. While the TD's and Ministers have no such requirement for their payout.

Something doesn't add up.

-Richard
 
hi daltonr. I've already ranted about PPP in the
Dublin metro thread. The simplest financial
analysis shows how utterly stupid it is to outsource
financing public capital projects to the private sector.
It is so unjustifyable that it has to raise suspicions.
I dunno what to make of McGreevy; the kindest
analysis suggests that he knows full well how much
"bad finance" is going on in government spending but
he doesn't care because the damage is spread over
such long periods (often decades) that there will be
little political fallout.
 
From today's Irish Times:
There was immediate speculation yesterday that the Treasury Holdings/Harry Crosbie consortium, whose plan for such a centre at Spencer Dock was abandoned in 2000 after ancillary hotel and apartment developments were refused planning permission, would be interested in this latest version of the project.

(for "immediate speculation", read "it's a done deal")

See? Treasury builds the Centre; the Govt pays rent to Treasury; Treasury pays Fianna Fail.

And before anyone mentions anything about a transparent tendering process........don't make me laugh!!

How do they get away with it?
 
How do they get away with it?
Click to expand...

They get away with it because nobody challenges them.
the opposition spend so much time getting worked up about stupid things that nobody cares about, or blatantly contradicting themselves just so they can oppose the policy de jour, that when a real scandal raises it's head nobody takes them seriously.

The media skirt around the edges of stories rather than
tackling the real issue head on. I saw loads of coverage of the fact that truckers wouldn't pay the Tolls recently. I saw no coverage of the sheer stupidity of having the Tolls in the first place.

Knock 15 minutes off the first 20Km of your journey and then
add 20 minutes to the last 1Km as you queue to get through a Toll bridge.

I'm beginning to like the Michael Moore idea. Get a few friends
together and join your local FF/FG/PD/Labour outfit. about 5 people will probably give you a majority depending on how local the party organises itself. Elect you and your friends onto the committee and start causing trouble. Raising questions at Ard Fheis etc. Ask the tricky questions of your candidates and TD's rather than joining in with the backslapping hoards.

It's amazing as pointed out in another thread that the backbenchers could get together and win themselves a golden handshake for giving up the dual mandate.
why don't we see that sort of enthusiasm about other issues.

With the possible exception of College Fees, I've yet to see them get worked up about anything.

-Rd
 
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