CIF chief urges swift NDP completion

THE Construction Industry Federation (CIF) has called on the Government to press ahead with the National Development Plan (NDP) and see it through to completion at the earliest opportunity.

CIF director general Liam Kelleher, commenting on the submission, said construction inflation should not be used by government for neglecting its commitment to the NDP. He said the Government grossly underestimated the cost of the roads under the NDP by about €9 billion.

It was up at €5.6bn and revised subsequently by the NRA to €15bn, but when the full programme was to hand, and there were additions, it was forced to dramatically revise the costs, Mr Kelleher said.

Even if the allegation were true that contractors were gilding the lily in the past Mr Kelleher said tenders over the past two years had declined by 4%.

Critics of the CIF say, of course, they have declined because there is substantially less work about due to the economic downturn and those active in the sector who were creaming it off during the boom are having to fight for business now.

Mr Kelleher insists the industry is whiter than white and waiting to deliver for the country its infrastructure needs at keen prices.

In its submission the CIF has called for:

The Exchequer funding devoted to public capital projects to be maintained at no less than 5% of GNP until infrastructure eliminated.

Exchequer funding should be supplemented by private sector funding (through PPPs) and leveraged to bring maximum impact in terms of early project commencement and delivery.

Pursuing the possibility of finding projects that can be supported from the

National Pension Reserve Fund - this makes sense given the above average growth predicted for Ireland.

More robust cost estimates need to be derived at the project appraisal and initial decision making stages of major projects to ensure realistic early assessments of value for money and greatly reduce the scope for project cost overruns.

Looking at the current housing controversy Mr Kelleher said it is often forgotten that when all of the taxes involved in buying a house are taken into account they constitute 40% of the total house price.

But the CIF has a bigger concern and that is the hike in stamp duty to 9%.

That is impacting on commercial property, something not being detected due to the current market turbulence.

Monies from stamp duty are remaining high but the level of commercial construction is falling, warned Mr Kelleher.

Stamp duty returns are staying because Irish and British financial institutions are selling out.

That is, masking the reality that Irish investors are shifting their attentions to the British and other property markets and the government ought to revert back to the 6% stamp duty as a matter of urgency or risk damaging investment in Irish commercial property, he said.