Agreement breaks out to spend billions on regional infrastructure

The chairman of IDA Ireland, Mr Denis Hanrahan, has announced that after five years of record-breaking job creation the agency is now refocusing its activity to direct more than half of all new greenfield start-ups to the disadvantaged areas outside Dublin.

The IDA's action is in accord with the thinking of the State's regional authorities who recently presented the Minister for Finance, Mr McCreevy, with an economic blueprint for the development of key growth centres outside Dublin. The blueprint, drawn up by economic consultant Fitzpatrick & Associates, encompasses EU treatment of the State as two regions for EU funding, the setting up of two new super-regional authorities, and makes specific recommendations for the National Development Plan (NDP) 2000-2006 which the Minister said he will publish before the end of July.

This runs in tandem with Northern Ireland's development plan, Shaping our Future, which was produced by the Department of the Environment Northern Ireland in 1998 and which envisages the development of key growth centres outside Belfast. For the first time the development plans north and south of the Border are to contain a common chapter in relation to cross-Border economic activity.

In relation to the Republic's NDP, Mr Peter Brennan of the Irish Business and Employers' Confederation has also made a submission, as have the Irish Congress of Trade Unions, the regional authorities, the voluntary sector and the Economic and Social Research Institute.

For once everybody seems to be in agreement on what needs to be done: the regions North and South must now benefit from a spread of economic activity away from the principal cities.

However, in debates and seminars organised by various bodies including the Department of Finance and the Royal Town Planning Institute over the past two months, the scale of the "infrastructural inferiority" outside Dublin has become apparent.

This isn't just in terms of motorways or rail links. For example, while £2.6 billion (€3.3 billion) has been invested in the telecommunications infrastructure in the period 1985 to 1998 and the backbone transmission network is now 100 per cent digital, only some of the main population centres are connected using high grade broadband 2.5Gbits capacity, fibreoptic cable which is required by high technology industries.

Unfortunately, these are exactly the high-tech industries which the regions want to attract. Indeed while there are 2.5Gbits links in most of the South and Eastern region, the Border, Midlands and Western regions have few, with none at all between Mullingar and Sligo or Athlone, Castlebar, Clifden and Ballina. It is these Border, Midlands and Western regions that the IDA had targeted in its new focus.

According to Prof John FitzGerald of the ESRI, high technology companies such as Intel and Hewlett-Packard were also restricted in where they located to areas where there is availability of industrial grade power lines. These are plentiful in the Dublin region but are not available in large parts of the west and northwest. However, Prof FitzGerald maintains that the overriding factor in the success of attracting inward investment is the availability of skilled, qualified labour.

The role of the institutes of technology has been identified as a provider of high-quality graduates which lure industry. However, while the educational qualifications of the State's workforce are rising quite dramatically these are people who can afford to pick and choose where they want to live.

Graduates tend to want a high quality environment in which to raise children and they demand a high level of social and commercial facilities as well, argues Prof FitzGerald. He instances Galway as being one place where it is perceived that there is a good quality environment and he links this to growth figures which show that Galway grew at almost twice the rate of the rest of the State in recent years.

The implications are that considerable investment in the living environment - for example water and waste quality schemes on loughs Ree and Derg - will be necessary before the areas will be deemed desirable places to live. "Traditional" infrastructural projects are easily identifiable. Roads which should be upgraded according to the Fitzpatrick blueprint include the Ardee, Co Louth to Nenagh, Co Tipperary route linking the Dublin/Belfast Corridor with Limerick/Shannon/Cork; the Moate, Co Westmeath to Enniscorthy, Co Wexford route linking Athlone to the Rosslare ferryport; the Athlone/Boyle/Sligo route to link Athlone to its hinterland and allow access to Sligo; the Sligo/Dundalk route picking up Cavan, Monaghan and Enniskillen along the way; and Dublin/ Derry as Derry is the only city on the island with no direct rail links to Dublin.

The improvements in rail links around the rest of the State have been costed by the Department of Public Enterprise in excess of £600 million.

Air access to the island is also an important factor in attracting inward investment and according to Dr Cormac McNamara, chairman of Waterford Regional Airport, the cost to foreign investment in commuting to Waterford via Dublin may be as high as £3,000 per day per executive. Similar arguments have been put by representatives of the other regional airports in the West.

The surprise of the NDP is not the volume of investment needed, but the fact that the State is prepared to undertake it, and appears to have the money.

Mr Peter Brennan of IBEC, who estimates the cost of the NDP could be as high as £35 billion, notes that "according to the ERSI the economy's finances are so robust that an investment of this magnitude, with a sprinkling of Public Private Partnerships, is a realistic prospect". "In this context it is encouraging that the ICTU and IBEC have a broadly common view on national investment priorities," he concluded.