A recent report from The Irish Fiscal Advisory Council suggests the State’s infrastructure is 25 per cent below average for a developed European economy, with four particular areas of concern identified: housing, transport, electricity and healthcare.
Given the robust state of the national finances, with a projected budget surplus of €25 billion this year – helped in large part by the Apple tax windfall – lack of funding is no longer the blanket excuse for why we are falling short in this area. Instead, focus is turning to a lack of joined-up thinking in public planning, physical and human capacity constraints, legal and regulatory obstacles, and a lack of long-term vision.
Despite good practice within Ireland’s framework for infrastructure approval and delivery, too often projects get stalled in discussions on risk, says Matthew King, director, infrastructure asset management and project management advisory, KPMG.
“Of course, risks and uncertainty exist but this rarely improves through waiting and risks need to be balanced against the risks of failure to deliver,” says King. “What are the social and economic costs in that scenario? Projects need the levels of resource, capability, and experience and delivery models to manage the risks. There also needs to be real political will to cut through the bureaucracy and create accountability for non-delivery. Leadership is required to embed a delivery-focused culture throughout the system.”
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The current annual funding model is not aligned with the reality of big infrastructure projects, he adds.
“It hamstrings projects and undermines the supply chain’s confidence. Whilst the NDP (National Development Plan) is a brilliant statement of ambition, the supply chain simply does not have belief in the pipeline. They need assurances that the funding will flow on a multiannual basis. Adapting more collaborative commercial approaches to balance the risk between client and contractor will also be essential if Ireland is to compete in the global supply chain market.”
Aidan Sweeney, Ibec’s head of infrastructure and environmental sustainability, agrees about the importance of multiannual budgeting. He believes the NDP needs to align and support the National Planning Framework; the framework suggests the State’s population will grow by one million by 2040, by which time an additional 550,000 new homes bill be required.
“We have the resources to tackle our infrastructure deficits. We need a fully funded NDP. There’s too much emphasis on cost and not enough on delivery,” he says.
Sweeney also points to the State’s need to plan for an ageing – as well as growing – population, while also meeting its renewable energy and carbon emissions targets. Issues such as water, with the Dublin region currently at 95 per cent capacity, and electricity supply – Ireland’s onshore and offshore generation potential remains underdeveloped – represent serious challenges, he says.
Another area of particular concern is the lack of skilled labour to address infrastructure needs, especially in housing. The Fiscal Advisory Council estimates that an additional 80,000 workers would be required to address Ireland’s infrastructure deficits. However, it suggested that improving current low levels of productivity in the construction sector could go some way to bridging that gap.
Sweeney says forward thinking and innovative approaches are needed here: “When we are in the process of procurement for a major building project, we should also be marketing to the people who could be building that project, not just in Ireland but overseas.”
Modern methods of house construction also allow for building at scale by organising large sections of the build in factories rather than on site, he adds. There are a number of Irish companies innovating in this space, especially serving overseas markets.
More innovative approaches could also be taken in the public sector in terms of mixing funding models and assessing needs on a geographic basis rather than a sectoral basis. For example, an area may need a Primary Care Health Centre and a school but currently these developments are organised on a siloed basis.
Lorcan Sirr, senior lecturer at TUD and housing policy analyst, makes the point that housing needs to be considered a central part of infrastructure, in the same way that the services associated with housing, such as roads, public transport, waste management, water and energy, are.
A huge portion of residential construction in recent years has focused on urban apartments, Sirr points out.
“The type of apartments that are being built are one- to two-bed units in central areas of cities such as Dublin, with rents of €2,000-3,000, for workers on 12-24 month contracts. That doesn’t suit the broader population in terms of either affordability or housing type,” he adds.
This results in young families, for example, moving to houses much further out from the centre, creating sprawl in areas that are typically badly served by public transport, resulting in more car ownership and traffic congestion.
One of the most practical steps Sirr feels the Government could take is to invest in more planners. There is currently a shortfall of more than 540 planning and technical staff; addressing this need would free up many bottlenecks in the planning system, he believes.
Observers agree that delays in planning remains a significant issue in tackling Ireland’s infrastructural problems. The Planning and Development Act, a big piece of legislation introduced by the outgoing Government, attempted to address this but many argue that flaws in the legislation and the likelihood of legal challenges will do little to help solve the problems, in the short-term at any rate.