Builders warn state spending cuts to hit 300,000 jobs

MORE than 300,000 jobs in the construction sector will have been lost in the space of four years due to a major reduction in state investment in capital projects.

The Construction Industry Federation (CIF) expressed concern that work on key infrastructure projects was set to decline significantly over the next 18 months due to a collapse in investment in transport, education, health, water and sewerage schemes.

The CIF warned the sector was in danger of losing thousands of skilled workers because of major cuts by the Government to target spending levels announced under the €184 billion National Development Programme 2007-2013.

CIF research claims the value of projects for which tenders have been issued is running “substantially below” the Government’s commitment to spend €5.5 billion each year between 2011 and 2013. It estimates that as little as €1bn worth of capital projects will be authorised by the Government this year.

The finding is based on a survey of Government projects awarded in the first two months of 2010 which amount to less than €45m. No projects were awarded in 28 of 35 city and county council areas.

“There is not a snowball’s chance in hell of €5.5bn being spent this year,” said CIF director general Tom Parlon. He also complained that “over-regulation” by numerous state agencies was impeding the start of some large-scale building projects.

The CIF claimed that actual work on up to 40% of state projects already put out to tender has not yet started with a time lag of up to three years in some cases.

For example, the contract for a new sewerage scheme for Tullamore, Co Offaly had still not been awarded despite the tender notice being issued 35 months ago.

The CIF has projected that the value of construction on all projects will fall below €10bn next year from €19bn in 2009.

It predicts employment in the sector will fall below 100,000 in 2011 from over 400,000 at the peak of the building boom in 2007.

The CIF has said there are only a few major capital projects in the pipeline with the expected completion of the inter-urban motorways later this year.

Mr Parlon added that the bulk of the this year’s capital budget of €6.4bn was related to projects under way. He called on the Government to publish a list of major projects due to go to tender over the next few years.

The Department of Finance stated last night that the Government’s capital expenditure of about 5% of GNP was high by EU standards. It also maintained that €5.5 billion would be available each year up to 2016.