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Construction crisis in Ulster

Northern Ireland’s construction sector is in danger of tipping over into crisis unless urgent action is taken to break a log jam of millions of pounds of work, consultants said last week.

All framework agreements in Northern Ireland have ground to a halt following legal challenges to the process, with engineers at the Association of Consultancy and Engineering’s (ACE) annual meeting in Belfast on Friday fearing massive job cuts. "The industry is in real danger of tipping over into crisis," said ACE Northern Ireland Group chair Gavin Browne.

The awarding of public sector contracts has effectively come to a halt since two contractors were successful in their legal challenges against the framework appointments made by the Northern Ireland Executive’s Construction Procurement Directorate and Department of Education. In both cases, judgements in the Belfast High Court found that the framework agreements should be set aside.

Construction is the highest employer in Northern Ireland and accounts for 15% of GDP. ACE chief executive Nelson Ogunshakin told NCE that the ACE was keen to work with the Executive to get the industry moving again, even if that meant awarding contracts on a case by case basis. "Serious times demand serious and decisive action from the Executive," said Ogunshakin. "ACE fully supports the recent calls by the Construction Industry Group for a raft of urgent measures to increase spending in our industry."

Those measures include releasing individual schemes using more traditional procurement routes to get work moving; diverting cash earmarked for capital budgets to inject money into construction; the freeing up of available funds from departments not spending and reallocating it to areas that can. The ACE is also calling for a review of all schemes currently halted due to legal challenges with a view to releasing them.

An unnamed government official suggested that awarding tenders on a case-by-case basis would only exacerbate the situation and could lead to a blizzard of writs. "Already since these two successful challenges – and these local court rulings were quite bizarre decisions – contractors have been given the fillip to challenge every procurement decision," he said.

Construction Industry Group for Northern Ireland secretary George Coulter told NCE that the current legal situation was indeed a "litigators charter" but that a reworking of the framework agreements would take at least a year and this was far too long a delay for an industry geared up and waiting to do the work.

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