Cuts will have 'catastrophic effects'

COMMITTEE REPORT:ANY FURTHER cuts to the Government's investment in infrastructure will have "catastrophic effects" on the economy, the Construction Industry Council has told an Oireachtas environment committee.

By next year, output from the construction sector is set to have fallen to just €7 billion from a height of €37 billion in 2007, which represented a “serious underspend” by Government departments, council chairman Eamon Timoney said.

More than 200,000 jobs had already been lost to the industry since 2007 and there was a danger that another 120,000 jobs would be lost if investment in construction was allowed to fall to €7 billion, he said.

“Vital public projects are being cancelled or postponed. Since 2009, existing contractual commitments are being cleared out and very few next projects are starting.”

However, he said the greatest concern was the lack of planning and design work which was being undertaken. There had been virtually no planning or design of capital infrastructure projects in the last 18 months to two years, and there was little prospect of such work in the pipeline.

The lack of “shovel-ready” projects would damage confidence, particularly among international investors, Mr Timoney said.

“We question the wisdom of withdrawing investment in infrastructure when this would lead the wider economy from recession to recovery.”

Every €1 billion cut from capital expenditure increases welfare payment costs, he added.