Construction industry in crisis says Galway TD

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The construction industry is in a crisis due to the massive increases in costs and the fact that Public Works Contracts have fixed prices, a Galway TD has said.

Galway East TD Seán Canney said that contractors are losing millions due to rising costs, and that they cannot recover these losses as their Public Works Contracts are fixed price.

He said that contractors entered these contracts in good faith and would have priced normal inflation in their tenders.

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

“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.”

Deputy Canney said that 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.

He added that 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.”