The Dublin region is gobbling up too much of the €6.1bn the Government is currently spending on major capital projects at the expense of economic activity in other regions, according to the business group for the construction industry.
The Construction Industry Federation (CIF) says that unbalanced growth and spending will harm the economy across the island at a time when many experts predict that rural and border areas have the most to fear from a hard Brexit.
It also wants the Government to look again at the “business as usual” economic model and instead promote Cork, Limerick, Galway, and Waterford as a region for technology, pharma, and biotechnology industries.
In a county-by-county analysis, the Construction Industry Federation says Co Cork only attracts €457 million of the €6.1bn the Government has allocated to current major infrastructure spending. According to the analysis, despite their large urban populations Cork and Limerick rank fifth and eighth respectively in the allocation of expenditure on major State projects.
At over €1.35bn, Co Dublin attracts over a fifth of the share of all infrastructure expenditure, and the greater Dublin region attracts about half of all such spending.
The analysis comes as the Government launched a review of its capital expenditure priorities for the years ahead. Expenditure Minister Paschal Donohoe last week said the mid-term review will invite wide consultations on ways to meet the country’s “social and economic needs”.
But calling for more spending across all regions, the construction federation warns that focusing growth on Dublin threatens the whole of the country’s prosperity and will only lead to more bottlenecks and “accommodation shortages, traffic issues and spiralling rents”.
“The formula for sustained Irish economic success is a strong capital city competing globally for FDI (foreign direct investment) and talent, complemented by dynamic regional economies that are all connected by world-class productive infrastructure. Through a lack of strategic planning and demographic trends, the capital has become the focal point for economic growth in Ireland,” said its president Dominic Doheny.
“We need to think of Ireland, North and South, as a region that must compete globally instead of our current fragmented approach. In this scenario, for example, Cork, Limerick, Galway, and Waterford are shaped into a hub that specialises in supporting high-tech, pharma, biotech, and life sciences. They are connected to each other, to Dublin and globally from advanced port facilities and airports. Dublin may choose to advance towards a financial services and technology hub based on an expanded Silicon Docks model,” Mr Dohney said.
In Munster, CIF regional director Conor O’Connell, said spending on infrastructure would help insulate the wider economy from the fallout of Brexit. “The Dunkettle Interchange-N28 project around Cork Port and the N5 Derry to Dublin road are two practical examples of the Brexit-proofing effect of infrastructure investment,” said Mr O’Connell.
“The first will support the capacity of the Port of Cork, our nearest Tier 1 Port to Continental Europe. This is critical as post-Brexit, Ireland will not be able to ‘landbridge’ exports from the UK around the globe. This has the potential to fundamentally undermine the competitiveness of Irish exports particularly in the agri and pharma sectors,” he said.
The CIF analysis covered 24 counties where there was a significant level of infrastructure spending either underway or at the planning or bidding stages. At over a quarter of the €6.1bn expenditure, projects contracted by Irish Water account for the single largest spending. The second largest shares was allocated to Transport Infrastructure Ireland, at 13% of the current spend. Last week Minister Donhoe said the Government had committed “substantial” additional funding to overall capital expenditure to 2021.
“Our original plan was to invest €42bn across all sectors, including €27bn in exchequer funding. The Government has added over €5bn to this, including our commitment of €2.2bn for housing,” he said.
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