Mr. Sean O'Connor:

This is a very difficult period right now with hyper-inflation, particularly in the construction sector and development. It is probably a vicious circle going on there and it could well get worse before it gets any better. I would be in full agreement with some of the things Mr. Curran alluded to. There are some elements within the public works contract that allow price variation. There needs to be more flexibility in there. It is impacting members in two ways. These are the schemes that were tendered for, where contractors and developers are coming back and saying that the prices are no longer adequate, and there are schemes on site where I believe there is a real risk of insolvency amongst contractors now. Generally, that is building up a head of steam, and it is unfortunate because everything is already expensive. Some of our schemes are starting to look unviable. Going back to the funding scheme, there are issues with that now around viability and it being based on older market valuations. As everyone knows, it is far more expensive to build an apartment than it is to buy an existing apartment, so there are issues around that. The situation calls for better flexibility. One thing I will say about the public works contracts is that they do not save the public any money, they do not produce value, and they never have. They probably cost the State money but we are tied into Europe in this regard. It is the procurement method that we must go through. A developer who employs a contractor will not go through the same process. They are time-consuming and they are costly. I have been told informally by more than one developer that it probably adds 20% to the costs. It does not save anything but we are tied into this process. I am sure that all of the local government people will have had nightmare scenarios of disputes with contractors and so on, as my colleagues here and other members of the Housing Alliance will be aware. If anything, there is an opportunity now because we have to look at it and something must be done about it.