An IDA for infrastructure is needed to tackle the serious problems the Republic faces in areas such as public transport and the road network, IBEC has said.

The business lobby group said that while the Republic had a premier division economy, its infrastructure was third division and resolving this problem was as important now as reducing unemployment was a few years ago.

"Unless drastic action is taken immediately, the country will grind to a halt in a short space of time," it said. IBEC believes appointing a minister for infrastructure and establishing an infrastructure implementation board to oversee all the strategic projects identified, would be a start.

It also believes that staffing in the public sector is a fraction of what it should be and recommends that project teams be set up to deliver the top 10 infrastructure projects.

Many projects under way now are merely clearing up a huge backlog of work, IBEC notes. For instance, it was announced in 1990 that a rail link to Dublin airport would be examined as "a matter of urgency". More than a decade later, a decision about this project is still awaited.

"We are already into the second year of the National Development Plan. Slippage in planning means construction will be pushed out further down the line," said IBEC director Mr Peter Brennan.

IBEC believes the Government could address capacity problems by bringing in outside contractors who would not face the same skill and labour constraints experienced by Irish firms.

But to attract large consortiums, projects need to be bigger. "Why has the Dublin to Cork motorway not been put out to a single tender?" IBEC asks.

It said the public-private partnership (PPP) process should be accelerated and made far more ambitious in scale and scope. The process is already working well in education and could be extended into areas such as health and affordable housing as well as the more obvious areas such as road building, it says.