A Clare builder is warning that the future will be bleak for the construction industry without rapid intervention by Government.
It comes as the Public Expenditure Minister is to bring proposals before cabinet to change public works contracts, as part of efforts to deal with spiraling costs for builders.
The Government has this week signed off on the 500 million euro Living Heart Cities fund, which is aimed at unblocking stalled development.
It will result in 5,000 apartments being built between 2024 and 2026 and will see the Government paying up to €120,000 per apartment to developers to fund the shortfall between spiraling building costs and current market prices.
While that doesn’t provide much solace for builders in Clare, a similar scheme for towns, which hasn’t yet been finalised is expected to be coming down the line.
Ennis builder Ciaran Breen is warning the future isn’t promising for the industry, as spiralling costs place increasing pressure on constractors.
He says he hasn’t been able to proceed with a private contract in over six months, as people are chosing not to go ahead with projects, and counts himself lucky that public works contracts are keeping him him afloat.
Clare’s Construction Industry Federation Representative says, however, that the difficulty with public works contracts is they don’t account for changes to the cost of construction.
This is agreed in advance, with contracts currently providing no mechanism for claiming back any additional costs incurred due to price rises.
Executive with the CIF in the Southern Region, Ronan O’Brien says this would have played a part in Roadbridge going into receivership, which had an impact on a considerable number of workers in the industry in this county.
Public Expenditure Minister, Michael McGrath says the government will pay 70% of extra inflation costs on public building projects, as part of a new framework.
Ronan says the changes can’t come quick enough.
