The Construction Industry Federation (CIF) has called on the Government to divert foreign currency reserves of up to €3 billion to infrastructure projects under the the National Development Plan (NDP).
It says the money should not be used to finance current spending.
CIF said the Republic had a second-class infrastructure and that, between 1982 and 1997, the State experienced significant under-investment in public capital.
The NDP had proposed to eliminate the State infrastructural deficits by 2006 and independent analysis carried out on behalf of CIF last summer indicates that that target will not be met.
CIF also estimates that there is a funding gap in the order of €9 billion at current values and that, at a conservative estimate, the roads programme of the NDP has a funding shortfall of €4 billion.
CIF director Mr Don O'Sullivan said: "The National Development Plan was priced in 1999 at 1999 prices and, since then, there has been huge inflation.
"Additional necessary projects were added and the scope of some of the projects needed to be increased, such as the Dublin Port Tunnel having to be made longer and bigger.
"On certain roads extra junctions needed to be added, the cost of land has increased significantly since 1999 as has compensation farmers receive for their land. Environmental and archaeological costs had also not been factored in to the initial pricing."
CIF said it believed the Government should designate a list of priority projects and put in place financial instruments to spread the cost over a 20- to 25-year period.
The statement added that there was already evidence of a slowdown in capital spending and that, over the past 12 months, 13 road projects had been delayed because of lack of funding.
A spokesperson for the Minister for Finance, Mr McCreevy, said spending on infrastructure is a budgetary matter and would be examined before the next Budget in December.
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