Economic appraisal of industrial projects in Ireland

Abstract

The paper sets out the method which the Industrial Development Authority (IDA) Ireland, uses in its evaluation of industrial projects and in determining the appropriate level of support for projects. It discusses the central roles of commercial viability, fiscal considerations and bargaining in this evaluation process. It also sets out the economic appraisal system used in evaluating large projects. The main purpose of the economic appraisal system is to guide decisions on the levels of grants warranted for industrial projects although on all occasions the focus in negotiations is on minimising the cost to the State consistent with having the project go ahead. The paper sets out the actions taken by the IDA to obtain the information required to implement the system and also presents some of the main conclusions arising from its implementation.