Imagine the scene: You’re the government official tasked with attracting foreign direct investment into the Cork and Limerick region. You collect a team of executives from a global US tech firm at Cork or Shannon Airport. They are interested in locating their European head office in the Munster region.
After exchanging pleasantries you begin your journey on the N20. The US representatives ask politely during the trip: “Is this a motorway?” You can only reply: “Not before 2030 it seems.”
In Cork City, the team ask about available accommodation and rent levels in the city. You explain there is an accommodation tightness in the city but some companies have been asking their employees to rent spare rooms to each other. Across the Cork region there are a series of critical and strategic infrastructure not yet started or which is on hold indefinitely. Projects such as the Dunkettle Interchange, the N28 road to Ringaskiddy, the N22 Macroom Bypass, the Northern Ring Road, Docklands bridges and various flood defence schemes.
Outside Cork, projects such as the N69 Foynes to Limerick road, the N24 Waterford to Limerick road and the N25 Cork to Waterford road are all critical to these regions.
These projects do not only benefit specific regions. Taken together, they enable regional growth that will spread economic recovery and provide a counter balance to growth in Dublin. Currently, Dublin generates 40% of Irish GDP. It’s worth noting London generates 20% of the UK’s GDP and that this is considered unsustainable. CSO figures show the capital’s growth in employment is outstripping significantly that of other regions. In other words, the Irish recovery is localised. Such a lopsided economy is not desirable or sustainable.
Recently, Dublin was identified as the No 9 of 200 cities for the worst traffic congestion. Residential rents are spiralling upwards. Commercial rates have reached pre-recession levels. The ESRI think tank recently found that commuting times for those working in Dublin were now back at 2007 levels as are traffic levels on the N40 and Dunkettle Interchange in Cork.
It is estimated the Cork region accounts for 17% of Ireland’s GDP. It is by far the second most populous region with a population of 520,000 according to the 2011 census. With such a significant economic and population base, the region deserves significant investment in infrastructure. It is also the only centre of population and economic activity that is capable of immediately acting as a counter of investment to the congested east coast.
Ireland is lagging behind in terms of infrastructure investment. The European Commission Ireland Report for 2016 was scathing about the state of Irish infrastructure investment.
The Construction Industry Federation believes that capital expenditure will need to rise to between 8% and 10% of GDP from about 4.8% of GDP at present.
The effects of this reduced spending can be seen everywhere. It is most visible when you visit regional towns and in the lack of housebuilding activity particularly outside the greater Dublin area.
It’s important to note any new Government will not be able to solve the housing crisis without investing in infrastructure.
One area requiring immediate focus is our long-neglected water infrastructure. Transport is another area for focus. In the Cork region some critically important transport projects were announced in the Public Capital Programme last year. The Dunkettle Interchange, the N22 Macroom Bypass and the N28 to Ringaskiddy for example.
There were, however, noteworthy omissions from the programme, including the Northern Ring Road around Cork City.
Probably the most glaring omission was the M20 Cork to Limerick Motorway. These projects facilitate further projects such as the relocation of the Port of Cork to Ringaskiddy, and investments in the marine, energy, pharmaceutical and biotechnology industries. They also open up residential land enabling the significant levels of housebuilding activity.
The Cork and Kerry region has traditionally punched above its weight in attracting investments. Sustaining this success is at risk.
Public investment in infrastructure typically has a potent short-term stimulus effect. Every €1bn invested in infrastructure leads to 10,000 jobs. Its main benefits are really seen in long-term growth. If we get infrastructure investment right in the regions, we will see the benefits across Ireland for generations to come.
Conor O’Connell is a director of regions at the Construction Industry Federation
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