infrastructure
The industry body has warned of the effects on the country’s infrastructure
Ireland’s consultant engineers are avoiding public-sector projects in favour of private-sector work and the impact on housing and infrastructure “will be disastrous”, a key industry body has warned the Government.
Shane Dempsey, the director general of the Association of Consulting Engineers of Ireland (ACEI), claimed that “the overly legalistic approach of the likes of the Housing Finance Agency means that consulting engineers, all other things being equal, will select other projects to avoid risk”.
The HFA declined to respond when contacted. Dempsey warned that unless the Government urgently adopts reforms set out in its pre-budget submission, Ireland faces further severe delays to thousands of homes and billions of euro worth of vital infrastructure.
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“The delays we see regularly arising from planning and the unfair risk they allocate to essentially SME businesses means that the attractiveness of critical housing and infrastructure projects is significantly diminished.”
Government procurement processes meant “risk is driven into the supply chain under the false economy that this protects the taxpayer and the Government”, said Dempsey.
This is manifesting itself through lower uptake from the market in public sector tendering
“This empowers too many government agencies and local authorities to attempt to pass risk entirely to the supply chain.
“This is manifesting itself through lower uptake from the market in public sector tendering. Most contracting authorities are lamenting a lack of interest from the market and mistakenly interpreting that as a lack of capacity.
“The reality is that consulting engineers and others in the industry, all things being equal, will select private sector projects because they are more attractive from a risk perspective.
The Government’s refusal to adopt net contribution clauses – which limit a party’s liability to an equitable portion of a loss – was “counterproductive”, he said.
“On multi-million euro projects, SME consultants have to pay for professional indemnity insurance to cover the potential mistakes of firms with multiple times their turnover due to the last-man-standing principle,” he said. “Why do we subject our domestic SMEs to these conditions and expect better outcomes?”
The Government had introduced some positive reforms but guidance on this was often ignored by government bodies who were “adopting onerous contractual conditions that force consulting engineers to take on levels of risk that could easily bankrupt them”, he said.
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