Contractors Paid to Maintain Closed Sites

The Irish Government have announced they are to safeguard state projects by paying construction firms in order to cover the cost of maintaining closed sites as a result of the coronavirus lockdown.

Paschal Donohoe, Minister of Finance announced last week that builders who were hired under its public works contract would be paid ‘agreed reasonable non-pay fixed costs’ incurred while sites were closed.

The payments reflect the fact that while government contracts don’t allow builders to claim costs arising from delays caused by the halting of work in order to comply with COVID-19 restrictions, they still face charges for security, insurance and leasing some plant and machinery.

Donhoe’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 Chartered Institute of Building (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 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 go some way to doing that.”

The recent socio-economic report from the CIOB entitled ‘The Real Face of Construction 2020’ emphasizes the role government, as a client, can play in subduing any volatility in the sector by providing a clear pipeline of infrastructure projects.

The CIOB added:  “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 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.”

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