The Government should consider increased road tolling, the introduction of incineration charges and evaluate the case for metered water charges, according to the Economic and Social Research Institute (ESRI).
The Government will have to introduce measures to change how citizens use infrastructure being built under national development plans, the ESRI says in an unpublished report seen by The Irish Times.
The institute also warns that Government capital spending should be cut to avoid overheating the economy.
While sufficient investment funds are "theoretically available" for the second national development plan, the ESRI warns that planned levels of infrastructure spending could congest the construction sector and increase prices in the economy further.
The report, which is due to be published in autumn, calls for cuts in levels of capital spending planned under the government's Multi-Annual Framework, as well as for the introduction of "accompanying measures" to improve spending efficiency.
The precise magnitude of expenditure under the next national plan has not yet been determined. But the Government's multiannual budgetary framework implies an annual outlay of around €9.6 billion between 2007 and 2013, the period of the next national development programme. The ESRI recommends that this be reduced to just over €8 billion.
"The economy does not have the ability to produce all the necessary infrastructure over the period to 2013 without squeezing out other important economic activity," the report's concludes.
Two possible responses to this constraint are identified in the report but one - the introduction of tax increases to reduce private sector demand for public infrastructure - is dismissed as not feasible politically.
Instead, the draft report argues that spending should be delayed until the economy has started to slow and planned spending will have a less inflationary impact. "This analysis urges for a slower ramping up of the investment with more of it after 2010 when there is a higher probability of the economy having slowed down."
It calls for the introduction of a "Resource Allocation Model" to improve project prioritisation. The draft report welcomes the Government's decision to prioritise the completion of the national primary road system in Transport 21. But it says the plan's priorities for fixed line rail and national secondary road projects require re-evaluation.
