CIF: State to meet only half of investment commitments

THE Government is set to only meet half of its infrastructural investment commitments in 2011, the Construction Industry Federation has claimed.

New research into public sector construction indicates that the Government is already well behind on the commitments it made in its recently revised capital investment programme, Infrastructure Investment Priorities 2010-2016.

The research, published in the CIF’s Public Construction Barometer, finds that based on the value of infrastructure contracts notified up to the end of June and presuming those projects are built, the public capital investment programme is running at less than half that required to meet the Government’s commitments for 2011.

The report tracks the volume and value of public sector building projects posted on the Government’s tender notification website.

Key findings included:

* Just €14m worth of contracts were awarded in June.

* In the first six months of 2010, €1.12bn worth of prequalification/open tender notices were issued.

* Based on notified contract awards, most parts of the country remain without any new project award in the year to date.

The report’s author, Martin Whelan, director of policy and research at the CIF, said the Government’s focus over the past 18 months has been on clearing out existing contractual commitments.

“As a consequence, the bulk of this year’s direct Exchequer investment will be expended on projects that are already under way, and in most cases completed. This would in normal circumstances be balanced by new projects yet to commence, and for which payment will be carried over into next year, but this report indicates that sufficient replacement contracts are not being prepared or awarded. The recent Exchequer returns, which show that capital spending is 25% behind profile for the year to date, reinforce this.”

CIF director Tom Parlon said that if Government departments “released the brakes” to bring projects forward, it would provide a boost for the economy and reduce the level of fiscal adjustment required in upcoming budgets. “At some point a decision will have to be made to focus on helping maintain existing employment in order to encourage confidence and activity in Ireland.”