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Cancellation raises spectre of four year slump

CIVIL ENGINEERING could face at least four consecutive years of economic decline if the Channel Tunnel Rail Link is cancelled or the concession re-bid.

Construction Forecasting & Research has recalculated its latest predictions with the influence of the £5.4bn CTRL taken out. Carried out exclusively for NCE, it reveals that while there would be little impact on output this year, the expected 5% growth in 1999 disappears, to be replaced by a small decline (see graph).

And without CTRL, output slips again in 2000 - to a level 10% lower than that of 1996.

The size of CTRL means that its cancellation or re-bidding - which could take up to three years - will even affect the construction sector as a whole. Total construction was set to grow by 2% in 1999. Without CTRL this shrinks to 1.4%.

Even a six month slip in the CTRL schedule could impact significantly on the civils sector. CFR forecasts that growth in infrastructure output during 1999 could be halved. If CTRL is delayed by a year, output next year will grow by just 0.5%.

CFR suggests that the knock-on effect on the rest of the industry of CTRL's cancellation or rebidding would be felt after 2000, as most of the regeneration associated with the link will take place towards the end of the five year construction phase.

Tarmac chief executive and Major Contractors Group chairman Sir Neville Simms said it was vital that construction began on the link within the next few months. 'Any substantial delay,' he warned, 'would endanger the skills base within the civils sector. It's already at a very low ebb and is steadily leaking away'.

A new survey by the Chartered Institute of Purchasing & Supply revealed that civils is already lagging behind all other sectors of the construction industry in terms of growth.

Alastair McLellan

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