£14bn needed for infrastructure - report

Ireland needs to invest £14 billion in its physical infrastructure or EU levels of income and living standards cannot be achieved and maintained, a report released yesterday by the Irish Business and Employers Confederation (IBEC) and economic consultants Fitzpatrick Associates claims.

If not addressed, this infrastructure deficit could seriously hamper the progress of the Celtic Tiger, warns the report "Filling the Gap' - the Nature, Scale and Costs of Ireland's Infrastructural Deficit." The report estimates the cost of correcting the infrastructural imbalance and bringing Ireland to an acceptable standard in terms of international competitors and economic needs.

It recommends the transport sector, including road, rail, airports and ports, needs a £5 billion cash injection, with 30 per cent going towards roads. In terms of motor way length, Ireland currently ranks with Luxembourg at the bottom of the EU. Germany ranks first followed by France, Spain and Italy.

Environmental services such as water supply and treatment of solid waste and waste water, require £3.5 billion or 25 per cent of the total investment suggested. Energy needs £2.25 billion or 16 per cent; Education, science and technology infrastructure £2,2150 million or 15 per cent; telecommunications £675 million or 5 per cent.

Currently, total spending under the 1994-1999 EU structural fund on "economic infrastructure" amounts to less than £0.5 billion annually, or less than half the amount required, according to the report.

Ireland's rapid economic growth will give rise to significant infrastructural bottlenecks unless accompanied by major investments. Development of indigenous and foreign industry may be hampered by the lack of a modern infrastructure.

Foreign firms hoping to locate here may view lack of proper infrastructure as a disincentive. The report claims there is considerable evidence that continued growth around major cities is related to their infrastructure level. The report also urges policy changes, including an integrated infrastructural policy, particularly with reference to transport and revisiting the issue of user charges for infrastructure by rationing usage and attracting private capital into the sector.