Construction firms to receive Government funding to off-set inflation

ireland
Construction Firms To Receive Government Funding To Off-Set Inflation Construction Firms To Receive Government Funding To Off-Set Inflation
The Construction Industry Federation (CIF) said the measures were a 'positive step'. Photo: PA Images
Share this article
Muireann Duffy

The Cabinet has agreed to provide funding to contractors working on public projects in order to off-set the rising cost of materials due to inflation.

The Irish Examiner reports the Government could offer up to €160 million by the end of the year under the new scheme, aiming to ensure public projects, such as new roads, public buildings and civil infrastructure, remain viable and are delivered on time.

Minister for Public Expenditure Michael McGrath said the measures are necessary due to the soaring rate of inflation in recent months, which have left construction companies who entered into fixed-price public projects struggling.

Mr McGrath said the scheme will also allow "an element of retrospective inflation cost recovery on paymenbts already made on project from January 1st this year", in recognition that inflation was increasing at that time in anticipation of Russia's invasion of Ukraine.

Advertisement

No time limit has been put on the scheme as of yet, Mr McGrath added, given the current uncertainty surrounding inflation.

'Not far enough'

Representatives from the construction industry have welcomed the announcement, however, said the system of public works contracts must be reformed.

The Construction Industry Federation (CIF) said the funding was a "positive step", but "will not go far enough to address the high cost base in the sector".

"It is disappointing that these measures will only be applied to all projects from January 1st, 2022 onwards and will not address the exceptional period of inflation since January 21st," CIF director general Tom Parlon said.

"The current situation has highlighted the necessity for essential reforms of the public works contract and the ability of contractors to accept the transfer of risk beyond their control.

"The CIF and its members have continually called for more collaborative contracts, which manage risk in a more balanced and sustainable way."

Read More

Want us to email you top stories each lunch time?

Download our Apps
© BreakingNews.ie 2022, developed by Square1 and powered by PublisherPlus.com