Committee Reports > List of Committees > Joint > 1985 > Committee on Commercial State-Sponsored Bodies > Report No. 03 - Bord Gais Eireannn

APPENDIX 8

Government Investment Criteria: Rate of Return

An investment in State-sponsored commercial bodies should be approved only if the expected return is not less than the cost at which the funds to finance it can be borrowed by the Exchequer or with a Government guarantee plus five per cent. This is now the target rate of return required by the Government on investments in public enterprises. In fixing a minumum target rate of return on new public investments in the market sector, it is preferable to err on the high side rather than on the low side. By doing so, the choice of projects will be biased in favour of those with a shorter-term pay-off. This would be desirable in present circumstances.

Source: National Planning Board, April 1984

- Proposals for Plan 1984-87, Chapter II.5, para 4. (iii)