The Economic and Social Research Institute has said that the Government's new National Development Plan will have to be cut back by 16% because the construction sector can not deliver it at a reasonable cost.
The ESRI is recommending that expenditure on social and affordable housing should be cut and that all rail projects including the proposed new Metro plan for Dublin should be subject to thorough cost benefit analysis.
The report also says the Government needs to reduce its plans for investment in health, public housing and transport. The money saved should then be used to increased use in these areas in the future when the economy slows down.
The fourth National Development Plan, due next month, was expected to include over €70 billion of infrastructure projects. A 16% cut back would mean €11 billion less would be spent on infrastructure over the next seven years.
However, the ESRI still envisages a very substantial investment plan including between 1,800 and 3,300 acute hospital beds, an additional 50,000 childcare places and the completion of the national primary roads network.
Commenting on the ESRI's report, the Minister for Finance Brian Cowen said the analysis that substantial investment in the country's infrastructure is fully justified was welcome.
He also welcomed the report's assessment that the current National Development Plan has 'greatly enhanced the economic and social infrastructure of the state with major benefits to economic development throughout all regions'.
