Tuesday, 14 December 2021
Ceisteanna ó Cheannairí - Leaders' Questions
First, I want to pay tribute to the sector, which I think has responded very well since we reopened society and sectors of the economy. Since the springtime, the construction sector has really rebounded, to be fair to it. From October to October, we are looking at approximately 31,000 housing commencements, which is a significant piece of work in terms of getting housebuilding back on track to the kinds of levels we need to deal with the housing crisis and the situation facing many people.
The Deputy correctly points to cost inflation in respect of construction, mainly because of global supply chain issues resulting from Covid-19, which have been a big problem across Europe and the globe. Some date it back to the blockage in the Suez Canal, which the Deputy may recall. Then Brexit can be added, which has not been helpful either in terms of some supply chains. There has been inflation and it has affected and impacted public sector contracts. We have had some situations where people who won tenders did not take them up on the basis that the costs have now overreached what they bid and could afford. The Minister for Public Expenditure and Reform is introducing changes and they are being put in place now for new tenders. The fixed-price period is being reduced by six months to 24 months, material price variation can be accommodated, subject to certain limits, and guidance is being issued for current contracts. The Minister acknowledges the issues the Deputy has raised. He brought the matter to the attention of Government some weeks ago. Measures are now being introduced to try to ease the situation and create additional flexibility to accommodate the new realities arising out of the supply chain issues and the increase in costs that have affected the industry.
The view from the ECB and others is that this should not be a long-term issue and that things will come back to an even keel towards the end of the first quarter of 2022, but that remains to be seen. There can never be any certainties in life, particularly in the middle of a pandemic, but we are very conscious of the issues. The Minister has moved on the tender front to recognise the realities of the situation and ensure construction projects that we want to get ahead have the capacity to get ahead, be they schools or housing across the board. There is a significant piece of infrastructural work that we require to be done and we have very large capital programmes. We want value for money and we want to be responsive to the current situation also.