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REGIONAL OPS 107

of Measures, both in terms of economic justification and actual outturn, including unit costs.

While the Non-National Roads measure does well, the actual targeting of the expenditures does not explicitly take into account the National Spatial Strategy. Of course, this reflects the fact that the NSS had not been published until the end of 2002. However, going forward this measure should reflect the NSS in terms of targeting. Furthermore, in at least some cases, the quality of the road improvements and maintenance can be questioned.

Table 5.5: Recommended Funding Allocations, 2004, € million

CSF NDP 2002 2003 2004 2004 2002 2003 2004 Expend- iture Commit- ments Preliminary Commitments Recomm- ended Expend- iture Estimates Recomm- ended Regional OPs 271 287 205 148 882 1,031 1,035 Local Infrastructure 153 134 90 148 563 662 730 Local Enterprise 67 62 50 0 91 81 40

Agriculture & Rural

Development 16 33 23 0 41 54 30

Social Inclusion & Childcare 34 58 41 0 188 235 235

Notes: For 2002 and 2003 the CSF expenditure includes Cohesion and TENS funding as well as public funding. These are not relevant for 2004. The 2002 NDP expenditure includes a small amount of PPP funding. The table only includes public expenditure by the EU and the State.

The Rural Water measure is justified on the basis that it provides resources to improve the quality of the local water supply as the Drinking Water Directive has been adopted, and there is an urgent requirement to make progress on water quality. However, the issue of cost recovery needs to be addressed, especially in the case of second dwellings (see Chapter 13). Physical progress has been good, while financial progress in the BMW region has been somewhat slow. However, the concern here is that the cost of improving the rural water supply per household is quite high, particularly in the BMW region where it is more than three times higher than in the Southern and Eastern Region.

With regard to Waste Management this measure has been delayed due to the lack of agreement on regional waste strategies, which has now been resolved. A further issue that is likely to arise going forward is local resistance to facilities. The measure comprises a number of different aspects, including recycling facilities, which are unlikely to be provided privately. However, hazardous waste facilities should be provided by the private sector by applying the polluter pays principle.

The Seaport Capacity measure suffers from high costs relative to the likely benefit. Seaports are not pure public goods in that there is a high degree of excludability and costs can easily be recovered from the users of the facilities. Therefore, the use of public funds is questionable, even though the facilities are clearly necessary. The cost of improving inland waterways is also quite high and, relative to many other Measures, this should not be given a high Priority, although some of the investment has a positive North-South effect.

Our assessment of E-Commerce and Communications measure differs somewhat from that of the OP evaluations. This is justified on the basis that these facilities should be provided by the private sector. This applies particularly to all larger urban areas, and especially a large part of the Southern and Eastern Region. There is, nevertheless, justification for supporting these facilities in the second tier urban areas, provided that there is some demand for the services (which should justify private sector involvement in their provision). The fact that the E-Commerce and Communications measure had to be altered due to the lack of private sector interest has added to costs, as pointed out in the BMW OP evaluation. This may be difficult to justify unless there is strong private sector demand for broadband services, which appears not to exist. In general the use of wireless facilities, which could be put in place in response to demand from the private sector requiring a lower level of subsidisation, is preferable, especially outside of the centres designated in the NSS.

The Cultural, Recreational and Sports facility measure is important from a balanced regional development point of view in that it can be used to contribute to critical mass formation in the centres selected in the NSS. In this respect targeting is important. This is despite the fact that they are probably of a lesser importance than some other local infrastructure facilities, but they play a key role in attracting both residents and businesses to the centres. Priority should be given to Measures that tackle social exclusion. The inland waterways Sub-Measure appears very costly. While it involves cross-border co-operation it pre-empts valuable resources that could be used to further regional balance and tackle social exclusion.

Part of the increased funding under the Local Infrastructure Priority should be used to establish a special fund within the Regional OPs to support infrastructure facilities in the gateways designated in the NSS. The funds should be used to support investment in key strategic facilities that would clearly contribute to the development of critical mass. The funds should be allocated on a competitive basis to designated centres on the basis of the forthcoming Regional Planning Guidelines.