The delivery of new homes by the private sector could be put in jeopardy if the State over-invests in long-term capital projects, the Government’s new blueprint for national infrastructure has warned.
The Cabinet on Monday approved a revised €165 billion National Development Plan (NDP) that will see €11.6 billion put aside for new public transport, nearly €6 billion for new roads projects and €3.6 billion for walking and cycling infrastructure.
Taoiseach Micheál Martin said the plan was “unprecedented in scale” and was the “largest and most environmentally conscious national development plan in the history of the State”.
The NDP recommits to building 300,000 new homes by the end of 2030, but there were warnings about the impact of over-investment on inflation and about capacity issues in the construction sector.
The plan says there is a risk that “investing too much over a given period could add to inflationary pressures in the construction sector and crowd out some desirable private sector investment, for example, in housing. Inflationary pressures cannot be met through additional expenditure as this would simply add to the effect.”
An economic analysis of the NDP also found that while a further increase in public investment levels could be appropriate, “it should be limited in the short term and subject to monitoring and review given the risks of overheating and poor value for money”.
Speaking in Cork, Mr Martin confirmed there would be challenges on the inflation side particularly over the coming months and that a watching brief would be kept on the situation.
Minister for Public Expenditure Michael McGrath said 10,000 new apprentices would come on stream every year from 2025 to fill the 80,000 construction jobs needed to deliver the NDP.
Timings and costings
The Government has come under fire from Opposition parties which hit out at the lack of timings and costings in the plan.
While MetroLink and DART+ are included, there are no completion dates for the projects. Sinn Féin TD Mairéad Farrell said there was a “distinct lack of details on costs, timelines and completion dates for the projects” which “casts serious doubt on whether they will go ahead”.
She said there was also “significant doubt about 30, or so, road projects which are stated to be subject to approval”. Green Party leader Eamon Ryan said not all road projects listed in the plan would necessarily get the go-ahead.
Mr Ryan said “the scale of the projects listed here, if you did them all in this decade you would probably have to have twice the budget and we would not have the workforce to do it. It will and should take time.”
He also said it was “better to be honest” and say that exact costs would become clear when a project came through the planning phase.
The Minister said the Government wanted competitive tension and did not want to be giving its baseline of how much it expected to pay too early.
Labour Party TD Ged Nash described the NDP as “a work of fiction” that “has all the hallmarks of an old-style political ready-up”.
The Taoiseach said the plan was not a “wish list” but instead “it is a very determined approach to modernising our country”.
The blueprint also allows rival towns and cities to bid for State funding for projects for the first time, with decisions based on an ability to deliver within a certain timeframe.
Some €5 billion in additional carbon tax receipts will also be allocated to increase capital investment levels in energy efficiency while another €1.5 billion is to go towards schemes to assist farmers in the decarbonisation of the agriculture sector. Projects will also be rated on their environmental impact.
