Galway Independent TD warns of job losses in Construction Industry unless Government allows some flexibility into the market.

Galway Bay FM Newsroom – Construction chiefs are warning that the ‘National Development Plan’ and ‘Housing for All’ are both under threat over rising costs.

Firms are threatening to pull out of state housing schemes and road projects after being locked into fixed price contracts that they just can’t afford.

Independent TD Sean Canney says contractors are losing millions and they can’t recover their losses unless Government allows some flexibility into the market.

He stated that the Construction Industry in Ireland is in a crisis due to the massive increases in costs and the fact that the Government are refusing to act on the Public Works Contracts which are fixed in price.

Contractors are losing millions in the rising costs, they cannot recover these losses as their Public Works Contracts are fixed price and no increases can be recovered.

“Contractors entered these contracts in good faith and would have priced normal inflation in their tenders.

Due to the unprecedent level of increases in the cost of materials, contractors cannot sustain such a level of loss. In fact, it may be considered reckless trading”.

The fear is that Contractors will walk away from Public Works Contracts and they are reluctant to price for works because of the uncertainty in material prices.

“The net effect is that contractors will go out of the business, workers will lose their jobs and the delivery of housing and other vital infrastructure will stop or be seriously delayed”.

Civil Engineering contractors are beginning to turn their back on Ireland and are concentrating their focus on work in the UK where fairer Public Works Contracts are in use.

“The Government need to act swiftly in this emergency and immediately introduce a contract clause to allow contractors recover the increases which are unprecedented and unsustainable.

There is no point in having contracts which are unworkable, and which will drive the industry into a deep recession.

Action by Government need to be immediate as the evidence is clear that the Public Works Contracts are not fit for purpose”.