The National Competitiveness and Productivity Council (NCPC) in Ireland, warns of “continual shortfalls” in water and energy, with it now posing a significant risk to the country’s image. The agency, in its yearly ‘competitiveness challenge’ review, affirmed that the extreme pressure on infrastructure will soon cause demand within the business sector to surpass supply. This situation, it cautioned, could have potential knock-on effects on Small and Medium-sized Enterprises (SMEs) and could influence the investment choices made by globally mobile, foreign-owned businesses.
The NCPC stressed that these challenges are amplified by a swiftly expanding populace, with current predictions intimating that the population may surge by potentially one million by 2040.
For better infrastructure management, the council advocates for a more harmonised strategy at the state level. These remarks align with recent appeals made by corporate heads, which seemingly has Taoiseach Simon Harris’ endorsement, advocating for the appointment of a dedicated minister of infrastructure.
The strain on Ireland’s energy grid was also underscored in the council’s evaluation, mentioning that though EirGrid’s forced outage figures indicated mild improvements in 2022, it was still the second most dismal year on record. A forced outrage rate refers to the estimated duration that a generation unit would be out of commission for electricity generation.
The NCPC further advised that, EirGrid’s assurance of no risk of a blanket power outage due to inadequate generation relies on the assumption of a steady supply of natural gas from both the Moffat terminal and the Corrib gasfield. However, they cautioned that the gas network itself is prone to significant fluctuations.
According to the council, “Infrastructure deficits curb competitiveness, and it is imperative for Ireland to strive forward to stay apace with global competitors.”
This report by the council comes after recent statistics from the Central Statistics Office reflected that power consumed by data centres exceeded a fifth of the total demand last year, surpassing the energy used by city homes for the first time.
The NCPC highlighted in October 2024, a fresh series of water and wastewater tariffs was put into action for companies. This development contributed to raising the cost of running an enterprise. A total of 188,625 non-domestic water consumers were recorded in the State.
The council recognised the need for a well-calibrated balance in the construction industry between various types of building operations and output (residential versus commercial as an example). The council drew attention to the stark difference between the largely vacant commercial property market in the wake of covid and the ongoing shortfall in the residential sector.
Their report offered a range of suggestions under several categories, which included adapting to technological evolution, leveraging the possibilities of the European Single Market, developing and maintaining a trained workforce, addressing hindrances in the advertising in the planning and execution of infrastructure, and the expense of doing business.
The council stated that the escalated costs confronting Irish enterprises have sparked an increased rate of insolvency. Based on the most recent PwC bankruptcy barometer, there were 416 insolvencies in the first half of 2024, marking a yearly rise of 25 per cent.
Frances Ruane, the NCPC chairperson, argued that addressing these critical infrastructural issues necessitates government intervention in the strategic prioritisation and planning of investment projects, coupled with enhanced efficiency in project delivery, particularly considering an economy operating at its maximum capacity.