Shelve Stadium Ireland - economist

Stadium Ireland and the Dublin metro system should be shelved so that key projects within the National Development Plan can be completed, a leading economist has argued.

Mr Jim O'Leary of Davy Stockbrokers said the average outlay in the first two years of the plan was about £2.7 billion (#3.4 billion). If the Government continued to spend at this rate over the balance of the seven-year programme, the total infrastructure spend would be about £18.6 billion instead of £21.9 billion - a shortfall of about 15 per cent.

"The NDP has fallen behind because the construction sector is working at full capacity and especially there are labour constraints," Mr O'Leary said.

To catch up, the Government would need to spend 24-25 per cent more per annum on infrastructure over the next five years. Given the acute capacity constraints within the construction industry, this is a very demanding target, Mr O'Leary said. He suggested a combination of measures that would increase construction capacity and/or reduce the public sector's demands on that capacity.

"The option of deferring or cancelling projects has to be looked at and Stadium Ireland has to be viewed in this context," he said.

"It is not just a question of whether the project makes sense, although that is a very valid question. It is also a question of whether, in the context of a construction industry that is severely constrained, it makes sense to be prioritising it or the proposed metro system for Dublin," Mr O'Leary said.

If things continue as they are, some projects will fall off the table, will not be completed on time, or will not be completed up to the requisite quality, he said.

It would make more sense to rank projects in order of importance and pursue them accordingly, he added.

Stadium Ireland and the Dublin metro system, proposed by the Dublin Transportation Office, are costly and not even part of the plan. They should be first on the block, he said.

He added there were many other semi-State investment plans that were not within the plan, such as enhanced transmission and distribution initiatives by the ESB and the development of Dublin Airport by Aer Rianta.

Mr O'Leary further pointed out that his estimates of what has been done in the first two years of the plan were predicated on the assumption that the allocations made in this year's Public Capital Programme were going to be spent.

He said if last year's programme was anything to go by, it would not be fully spent, making the shortfall relative to the National Development Plan target even larger than his estimate.

Mr O'Leary said more foreign workers should be encouraged into the labour force, particularly in areas such as construction, to ease this constraint.

He suggested firms could recruit abroad and farm out some projects to overseas companies that bring in their own workers.