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The Irish government is to safeguard state projects by paying construction firms to cover the cost of maintaining sites closed as a result of the coronavirus lockdown. The Chartered Institute of Building (CIOB) has welcomed the plan.
Minister of finance Paschal Donohoe announced this week that builders hired under its public works contracts would be paid “agreed reasonable non-pay fixed costs” incurred while sites were closed.
The payment reflects the fact that while government contracts do not allow builders to claim costs arising from delays caused by halting work to comply with coronavirus restrictions, they still face charges for security, insurance, and leasing some plant and machinery. Donohoe’s department said: “The ex gratia payment will be determined as a daily rate with reference to the contractor’s fixed costs as set out in their detailed price breakdown on a case-by-case basis.”
The CIOB said: “Any actions that provide clarity and relieve uncertainty at this challenging time are welcome, and we commend the measures announced aimed at safeguarding Project Ireland 2040.”
It added: “It is encouraging to see the commitment to a timely restart to construction, which will offer the guidance and confidence that the industry needs during this period of upheaval. Government can mitigate the industry’s immediate downturn by smoothing out spending on construction projects, and the measures announced today go some way to doing that.”
The CIOB’s recent socio-economic report entitled ‘The Real Face of Construction 2020’ emphasises the role government, as a client, can play in subduing volatility in the sector by providing a clear pipeline of infrastructure projects.
The CIOB commented: “Project Ireland 2040 has provided this pipeline, and its preservation by the measures announced this week will facilitate a timely restart to construction.
“Ireland’s national development plan has recognised repair and maintenance of the country’s existing infrastructure as a significant driver of future infrastructure demand, and a sizeable share of construction output in Ireland accounted for by repair and maintenance work.
“It is therefore crucial that, as well as new capital projects, repair and maintenance work can restart too. Repair and maintenance work will ensure that when the economy returns it will be supported by a fully functional national infrastructure system. At a time of huge flux for construction, repair and maintenance work will also maintain the skills and talent in the construction workforce that the country has worked hard to develop since the economic downturn.”
