By Paddy Clancy

The Irish government unveiled a $245 billion new development plan for the country for the next seven years on Tuesday.

Although its timing will be seen as an election campaign carrot, ministers have insisted the announcement of the details are a natural progression of the last seven year plan which concluded a few weeks ago.

Finance Minister Brian Cowen said the new National Development Plan (NDP) is a "window of opportunity to address, in current resource terms, infrastructure deficits."

He said that in the next decade it could be too expensive to address current infrastructural deficits in housing and transport.

"In the next decade the cost components of implementing this plan could be beyond our capacity,” he said.

Cowen did not appear concerned by recent suggestions by the Economic and Social Research Institute, the government’s own economic watchdog, that the amount of capital investment being planned could fuel inflation.

He said that while in 2002 construction industry inflation had run at 12%, the industry now had better capacity to handle the government's investment in capital projects.

Implementing agencies such as the National Roads Authority and the Rail Procurement Agency were now well resourced and experienced to deliver the capital programs and projects in the new plan.

He said the government was “strongly of the view that the quantum of investment required over the period is considerably in excess of that recommended by the ESRI.”

Taoiseach (Prime Minister) Bertie Ahern said the plan would “transform” the country over the next seven years.

“It will set important foundations for the next phase of our country’s development,” he said.

“This investment is also essential to help us meet emerging challenges. We will continue to build on the substantial progress we are making in delivering a quality of physical infrastructure that is appropriate to our evolving 21st-century needs.”

He confirmed a commitment to invest $28 billion in 77,000 social and affordable houses.

More than $45 billion had been earmarked for developing social infrastructure across a range of areas including hospitals, primary care facilities, with emphasis on improving the lot of the elderly, sports and cultural facilities and policing.

Ahern said the scale of funding in the new NDP was unimaginable until recently. He said the measures went towards maintaining and improving Ireland’s position as “a respected openly trading economy and society on the global stage.”

“This new National Development Plan will also see a new deployment of resources in supporting the productive capacity of our enterprise sector, equipping it to compete effectively in an increasingly knowledge-intensive and interconnected global community,” he said.

“At a point in our national development where future prosperity has never been more dependent on unlocking the talents of each and every citizen, we are reinforcing the emphasis on skills and training to ensure adaptability to the accelerated change we face.”

Ahern also signaled that under the plan where will be extra spending on north/south projects, social programs as well as commercial activities.

Justice Minister Michael McDowell revealed that $35 million will be spent over the next seven years to fight racism and inequality in Irish society. The funding is part of the $3.7 billion package of funding for Justice and Equality programs.

The police force is to get a $470 million windfall for new stations, and to develop other resources.

In early reaction to publication of details of the plan, the tourism industry welcomed it. Tourism has been allocated funding of $800 million in the National Development Plan to help with marketing, training and product development.

The Irish Tourist Industry Confederation said it "particularly commended the government for its very strong endorsement of the tourism industry as a vitally important source of economic activity into the future.”