The Republic must address its high cost base if it is to continue to attract new foreign direct investment, the American Chamber of Commerce in Ireland has warned.

The chamber, which represents the more than 600 US companies operating in Ireland, says a growing number of US firms are looking elsewhere to invest because of the rising cost of doing business here.

Improving infrastructure, tackling labour shortages and increasing investment in the knowledge economy are other areas the chamber believes the new National Development Plan must address.

"In a recent survey of US firms operating in Ireland, some 43 per cent indicated that Ireland was no longer a preferred location for further investment, while 41 per cent indicated that Ireland was not as attractive a location for investment compared to when companies first set up," Dr Fraser Logue, president of the chamber, said.

Speaking at the chamber's annual Fourth of July lunch, he added: "Some 25 per cent of US firms said that further investment in Ireland had already been lost as a result of either the cost or availability of labour."

The chamber is preparing a submission on the new National Development Plan, which will cover the period 2007 to 2013, and will be delivered in the next week.

It calls for guaranteed two-hour business access by road to Ireland's international airports by 2010. It suggests that this be achieved by the National Roads Authority building higher capacity roads to dual carriageway standard ahead of the timeframe envisaged in Transport 21.

On the issue of labour shortages, the chamber is calling for the use of tax credits to assist up to 30,000 people to secure third-level qualifications as part of a national programme on life-long learning, with priority attached to science and technology.

The submission also makes recommendations on broadband, calling for 100 per cent coverage no later than 2008, while it believes that the local loop should be opened up unconditionally.

It suggests that a national waste management authority be set up to deal with the growing cost of waste disposal, which has risen from €32 million in 1995 to more than €480 million in 2004.