In a few weeks' time the Government will consider Ireland's strategic investment requirements for the seven-year period 2000-2006. A National Development Plan (NDP), the Millennium Plan, as it could be called, must be submitted to the European Commission as a precondition for drawing down the £3 billion in EU co-financing approved at the Berlin Summit.

The Government is not short of advice. The ESRI's report, excluding teachers' pay and public housing (neither of which is eligible for EU funding), made the case for a £30 billion public investment programme. Two consultancy reports from Fitzpatrick Associates identified the investment needs of the State's two regions; this came to a more modest £22 billion. The social partners too have identified their priorities.

A consensus is emerging around four core areas of investment. Infrastructure, including public transport, is top of everyone's agenda. Next comes human resources, including measures ranging from education and training to childcare.

The productive needs of the economy are likely to be grouped in a single programme. This will cover agriculture, enterprise grant supports and measures for the tourism and marine sectors. Finally, there is likely to be a dedicated investment programme to ensure that the aim of balanced regional development is translated from theory to reality.

This may all seem fairly straightforward. However, when one delves into the details, then the scale of the problems facing the economy and the challenges which have to be tackled by the public and private sectors become all too apparent.

Investment in the national primary road network has been under-funded for over a decade. Thus one might have expected that a pipeline of projects could be started once the necessary funding became available.

Not so; it will take at least three more years before a sufficient number of projects is ready to draw down the recommended level of investment.

The availability of money is no longer the problem. The main bottleneck is the planning process. Thus the forthcoming Bill to streamline the planning process will be crucial if the huge investment needs that will be identified in the NDP are to have any realistic probability of being completed within seven years.

IBEC has made a series of detailed proposals for planning reform and we hope very much that these would be fully reflected in legislation.

Labour and skills shortages are another major bottleneck which, unless addressed in a comprehensive manner, will choke economic growth, with the prospect of wage inflation - and the linked issue of house prices - the most immediate problem.

Practically the entire focus of the present National Development Plan (which covers the six-year period to 1999) is jobs. That was understandable in 1992, but the labour market has changed quite radically in the meanwhile.

The crucial question is to what extent the current policy of allocating significant public investment to promote employment growth is necessary in an economy rapidly heading towards full employment. With low interest rates within the euro zone and a low single rate of corporate tax in prospect, what are the essential supports required to secure the competitive position of the business sector, while at the same time providing sustainable, well-paid and highly skilled jobs?

Certainly R&D and innovation will be near top of the list, as will be other measures to improve labour productivity.

Prudent and focused decisions need to be taken in the face of the ESRI argument that private and public companies which can afford to make investments from their own resources should not necessarily have to rely on EU or Irish taxpayers' resources. Many enterprises will need ongoing support, particularly in the key early stages, to ensure they optimise their development potential.

Then there is the issue of regional development. The central aim of the NDP should be to eliminate regional income disparities within Ireland and to facilitate balanced economic activity. But how will this be delivered on the ground in the two new regions in an effective and focused manner?

The myriad of agencies and organisations currently tasked with providing public services will have to have their mandates reviewed and clarified if balanced regional development is to become a reality.

Another dichotomy facing the Government is the selection of investment programmes which will be consistent with the EU's (and the Government's) commitment to reduce greenhouse gas emissions on foot of the Kyoto Declaration. The entire economy - industry, farming, transport and domestic consumers - is affected.

Thus the Commission, in evaluating the NDP in line with its own guidelines, will be very conscious of the need for the plan to contribute in a meaningful way to sustainable development. In tandem, the Government will have to put in place a national spatial plan within two years (and not by 2006 as is currently envisaged within the public sector).

A new ingredient in the NDP will be Public-Private Partnerships (PPPs). In essence, this involves the private sector investing in public infrastructure. The rationale for such an approach, which has been pioneered by IBEC/CIF, is to bring about accelerated and additional building.

The consumer will have to pay for these large-scale projects by way of tolls and charges. Suitable candidates for PPPs include motorways between Dublin and large urban centres, LUAS, the Eastern bypass in Dublin, bridges, education infrastructure and refurbishment of the State's courthouses.

Provided the barriers to the successful use of PPPs are eliminated, then private investment to a value of between £2 billion and £5 billion may be forthcoming over the period of the NDP.

If Ireland is to become one of the world's most competitive economies - and this should be the imperative - then the NDP must be as ambitious as is affordable given the constraints of the Stability and Growth Pact.

This implies an acceptable basis for the determination of public sector pay. Stretch targets for productive public expenditure must be agreed.

Above all, we must eliminate our infrastructure bottlenecks within seven years. This will require massive investment in the region of £30 billion to £35 billion. According to the ESRI, the economy is so robust that an investment programme of this magnitude, with a sprinkling of PPPs, is a realistic prospect.

On specifics, the NDP could allocate EU, PPP and Exchequer funding as follows:

1. Physical Infrastructure, including public transport (40-45 per cent)

2. Employment and human resources, with the Action Plan for Employment the centrepiece (30-35 per cent)

3. Productive investment (20-25 per cent)

4. Balanced regional development (5-10 per cent)

The Government's decision on the NDP will not only shape investment priorities for the foreseeable future but will also redefine policy priorities to reflect the new economic and social circumstances. Its key features may be factored into the eventual successor agreement to Partnership 2000. In this context, it is very encouraging that both IBEC and ICTU have a broadly common view of national investment priorities.

Strategic decisions affecting the well-being of the present generation will be taken by Government in the very near future. To secure the essential national consensus that is needed to drive the process forward - from social partners to political representatives - all concerned should be fully engaged before Brussels is informed about what is, in essence, an issue of fundamental economic and social concern to the entire economy.

Peter Brennan is IBEC's director for EU affairs and strategic planning

Tomorrow: Patricia O'Donovan of the ICTU on what we can do for ourselves.