THE NEW Government policy of going for construction contracts that heap all risk of price over-runs onto the contracting company is going to elbow out medium and small build- ing firms and cost the taxpayer more in the long run, it has been claimed.
President of the Construction In- dustry Federation (CIF), Hank Foga- rty stated that the new public sector construction contracts would push up the price of building public infra- structure in Clare and damage small and medium contracting companies throughout the county.
The CIF president further criticised Government for ignoring the indus- try view on the changes and for aban- doning the principle of partnership that was the hallmark of successful construction contracts throughout the rest of the world.
Fogarty was speaking at a CIF In- ternational Conference titled “New Directions in Construction Procure- ment: International Best Practice’, held in the Davenport Hotel last week.
“In Ireland, a country in a unique period of infrastructure catch-up and one whose long-term sustainable
economic development depends on ST e-Ne BLOr-LBUNTSM sD. GR IBUNTSA-H OCG Moy pas) Uca DAMN ITE frastructure bottlenecks, it is critical that we get the contracting relation- ship right. This is particularly so as we embark on a new and ambitious National Development Plan that will run to 2013. However, any independ- ent examination of the new contracts will show that Government has got it wrong,’ he said.
The CIF president said that the principles of risk recognition, risk sharing and risk management and, more importantly, the principle of partnership had been abandoned by Government in favour of the princi- ple of risk transfer at any cost.
The experience elsewhere is that this type of contract simply leads to confrontation and conflict. He added that the adoption of such a model meant that smaller and medium com- panies, of which there are many in Clare, couldn’t compete for Govern- ment contracts.
‘The industry has asked Govern- ment on a number of occasions to look at the alternatives.
“Unfortunately, this had not been done and the negative consequences will become apparent over the com- ing years,” Mr Fogarty said.