CONSTRUCTION the official magazine of the construction industry federation october 2015
main contracting Talking GCCC Review, Capital Programme & future prospects
January/February 2015 CONSTRUCTION 22
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EDITORIAL A This month’s cover taken by Conor McCabe on 1st September at Grangegorman, Dublin, features CECA President Pat Lucey and MBCA President John O’Shaugnessy
s we go to press the Government’s capital programme is about to be published. The programme’s details will make for interesting reading, particularly for CIF members, some of whom have expressed frustration at the delay in publication. A more timely release would have meant contractors could better plan the year ahead. Having said that, an ambitious capital programme sends a positive signal to the construction sector and wider economy. Leaked details of €450m for state nursing homes, €1bn for a ten-year flood defence system plan and Dublin Airport finally securing a rail link are all good news for contractors. In mid-October Budget 2016 will reveal how far the Government is prepared to help the housing sector. In its pre Budget submission (page 5) the CIF outlined its proposals to kick-start the sector. Abolishing local authority levies and a help-to-buy scheme are just two of the measures the Federation says will make a difference. Housing is in the news every day, it seems. It’s
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Construction House, 4 Eastgate Avenue, Little Island, Cork. Tel: 021 4351410 Fax: 021 4351416 Email: cifcork@cif.ie PRESIDENT: Michael Stone Director General: Tom Parlon Chief Operations Officer: George Hennessy
no surprise, therefore, that housing is one of the main themes at this year’s CIF Annual Conference. While the current frustrations facing the housing sector will make for stimulating debate, the other main theme of this year’s conference is the role of construction in helping deliver foreign direct projects to Ireland. The professionalism of the Irish construction sector is critical to driving growth in FDI and the confidence multinationals have in the industry is a positive theme to bring to conference. C
MAIN CONTRACTING: Martin Lang, Alison Irving SPECIALIST CONTRACTING: Sean Downey, Gillian Ross INDUSTRIAL RELATIONS & EMPLOYMENT SERVICES: Jean Winters, Cheryl Treanor EASTERN REGION: Hubert Fitzpatrick, Noel O’Connor SOUTHERN REGION: Conor O’Connell WESTERN / MIDLAND REGION: Justin Molloy SAFETY & MANPOWER SERVICES: Dermot Carey LEARNING & DEVELOPMENT: Robert Butler, Laura Dennison MEMBERSHIP: Renee McManus FINANCE / ACCOUNTS: Gabriel MacGrath COMMUNICATIONS & MARKETING: Anne Cleary, Rosalind Travers
CIRI CIRI OFFICE: Jeanette Mair CIRI CPD OFFICE: Robert Butler affinity schemes Safe T Cert Dermot Carey Affinity Cover Joe O’Brien, Justin Molloy, Gillian Heffernan CQAI Robert Butler Register of Heritage Contractors Jeanette Mair Imagine Renee McManus CERS: Frances McNally Tel: 01- 407 1434 Email: info@cers.ie MILESTONE ADVISORY: Susan O’Mara Tel: 01- 406 8021 Email: info@milestoneadvisory.ie CWPS: Brigid Finn Tel: 01- 406 8025 Email: info@cwps.ie
DIRECTOR / EXECUTIVE TEAM HOUSING & PLANNING: Hubert Fitzpatrick, Noel O’Connor, Jeanette Mair
October 2015 CONSTRUCTION 01
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COVER STORY STATE OF MAIN CONTRACTING SECTOR
CONSTRUCTION
CONTENTS
5 CIF NEWS
38 CAPITAL ALLOWANCES
Budget submission, Higher Options
Claiming not as simple as you think
20 CONSTRUCTION EXCELLENCE
41 NEWS EXTRA
Mercury Engineering and New South Glasgow Hospital
Solving housing crisis
26 PT&C
Details of SCSI housing report
Vital work of this CIF committee
43 SCSI REPORT 45 IRELAND REPORT
29 ACCIDENT REPORTS Are these reports privileged?
How international market views construction
32 CIF ANNUAL CONFERENCE
51 CONSTRUCTION RECRUITMENT
The who, what and where of Conference ‘15
Talking to recruiters about jobs market
35 CONSTRUCTION NUMBERS
All the CIF courses
Activity report from team at CIS
55 TRAINING
05 57 INDUSTRY NEWS Stories from wider construction sector
63 DIARY CIF meetings and events
37 PENSIONS UPDATE
64 LAST FIX
Tax relief and your pension
Numbers, stats, facts & figures
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OCTOBER 2015
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CIF NEWS
CIF highlights Budget measures to increase construction activity
The CIF delegation heading to a pre Budget meeting at the Department of Finance, 17th September 2015: (L-R) Hubert Fitzpatrick, Director of Housing & Planning, Anne Cleary, Director of Communications, Tom Parlon, Diretcor General, Philip Crampton, Chairman of PT&C Committee, Dominic Doheny, Senior Vice President, Niall Bourke, MEBSCA President, John O’Shaugnessy, MBCA President and Hugh O’Neill, Chairman, Irish Home Builders Association A removal of local authority levies on new home construction and a help-to-buyscheme for first time buyers are just two of the measures included in the CIF pre Budget submission. A delegation from the CIF presented its submission during a meeting with Minister for Finance, Michael Noonan TD and Minister for Public Expenditure and Reform, Brendan Howlin TD in the Department of Finance recently in the run up to Budget 2016. The meeting allowed the CIF to discuss some of the major issues facing the industry ahead of the Budget, while also providing a direct opportunity for the CIF to highlight specific measures that the Government can take to increase activity in the construction sector. In comments made after the meeting, the Minister for Finance Michael Noonan, TD, said it was “obvious” there was a lack of three-bed semis around Dublin. He also said a review of mortgage caps for first time buyers should take place. “Builders would
say that the application of the prudential regulations from the bank might be too restrictive,” he said. Speaking to The Irish Times the Minister went on to say: “What I’m saying is that market conditions are changing rapidly and there are aspects of it now which, according to the construction industry, are inhibiting starter homes. All I’m saying is the bank should review. If the bank say we’re not changing anything then of course I’ll accept that.” In advance of the meeting CIF Director General Tom Parlon said: “Although the industry is beginning to see strong growth in terms of output and of employment, with the latest CSO figures showing almost 126,000 people employed in our sector, we are still a long way off where the industry needs to be. “The Government must ensure that they deliver a programme of growth for our industry, as set out under the Construction 2020 policy document. This will enable builders to build, renters to rent, and
purchasers to purchase. A very simple, yet effective example of how to do this would be to introduce a ‘help to buy’ scheme for first time buyers, similar to the UK model. “We are also eagerly awaiting the announcement by Government of its five-year spending plan on capital projects, which has been discussed by the Economic Management Council on 16th September. This is of huge importance to our industry because in previous times, public spending represented about 50% of the activity in our sector. Thankfully the 2014 budget saw a reversal of the trend in cutbacks on public spending on capital projects, and we hope budget set aside for construction and social housing related projects will be ring-fenced in the upcoming announcement”. Key priorities set out by the CIF in advance of the meeting with the two Ministers are outlined in a detailed CIF pre-budget submission, including: > Introduce a ‘Help to Buy Scheme’ to assist first time home buyers. > Introduce a tax incentivised savings scheme for future purchasers of new homes. > Reduce development costs for housing, including development levies. > Introduce a temporary VAT rate of 9% for residential construction for a two year period. > Restoration of 100% tax deduction on the interest expense incurred on loans to investors in residential property. > Reduction of Capital Gains tax to 20%. > Facilitate renewal of construction related jobs and support for apprenticeship training. CIF Director General Tom Parlon concluded, “The proposals from the CIF which will be discussed with Minister Noonan and Minister Howlin are measures that the Government can easily implement in the upcoming budget. The construction industry has returned to growth and jobs are being created, but now is the time for assistance from the Government to ensure that the gains are not lost.”
October 2015 CONSTRUCTION 05
CIF building the future at Higher Options
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s the construction sector shows continuing growth the demand for graduates and qualified tradespeople is increasing. At the recent three-day Higher Options exhibition in the RDS, the CIF was there promoting the industry as an excellent career choice for school leavers. Along with Dermot Carey, CIF Head of Safety Services, a number of graduates and
apprentices from CIF member companies gave their time at the event to talk to students about opportunities in construction. As CIF President Micheal Stone says: “What I love about the construction industry is how no two days are ever the same. Each day brings a new challenge and new possibilities. I don’t think I would have had the same prospects in any other industry.” Some of the graduates and apprentices
who attended the CIF stand during the exhibition included: Ciaran King, King & Moffat, Partick Brereton, Clancy Construction, Thomas Kane, Winthrop Engineering, Brian Burke, Imtech Suir, Oisin Murphy, Sisk, Domenic Cunningham, Mercury, Colm Kearns, Designer Group, Andy Nicholson and Ian Casey, BAM and Caroline Burke, Imtech Sur. Paul Cremmins, and Joe Lavin, both directors with Imtech Suir also attended.
(L-R) Brian Burke, Imtech Suir, with Ellen Downey and Zoe Manning, both from High School, Dublin
(L-R) David Brennan, Clancy Construction, Joe McGahern and Cathal Rabbitte, both from Cavan (L-R) Dermot Carey, CIF, with Chloe Mc Donohoe and Amy Ashe, both from Cluny Killiney (L-R) Tom Parlon, CIF, with Louisa Maye, Chloe Mc Donohoe and Amy Ashe from Cluny Killiney
#Mindourworkers The Ring of Kerry Charity Cycle on 4th July this year saw a number of BAM employees completing the 180k route. BAM staff were keen to support the “Mind Our Workers” campaign launched recently by CIF and Pieta House. This campaign’s aim is to raise awareness on suicide and mental health within the construction industry in Ireland. Pictured: BAM HR Manager, Adrienne Bryan and her fellow BAM cyclists were delighted to present a cheque for €1,000 to John Season from Pieta House, to help support this campaign at his recent presentation to BAM employees.
06 CONSTRUCTION October 2015
Industrial Relations at the CIF Good industrial relations and human resource management are of particular importance during the current growth in construction activity. With the volume of employment and industrial relations legislation in place, companies have to ensure that they are fully up to date with all legislative requirements. The Industrial Relations and Employment services offered by the CIF are free to member companies. As this comprehensive service is based on firsthand experience and knowledge of the construction industry it is unrivalled by any commercial organisation. The CIF is uniquely positioned to advise and support construction companies with their human resource management requirements and industrial disputes. As the CIF understands how the industry work, it offers its members practical advice on how to manage and optimise human resources, while
Jean Winters, CIF Director, Industrial Relations and Manpower Services
also keeoing members up-to-date on employment law developments affecting their workers. The alternative to getting it right is referral to Employment Tribunal bodies such as the Rights Commissioner Service, the Labour Court, the Employment Appeals Tribunal and the Equality Tribunal. If you are referred to
these bodies, the CIF will prepare the case and represent your company as part of our comprehensive service to our members. The CIF provides industrial relations information, advice and support on a range of issues including: > Guide to employment conditions in the construction industry > Employee handbooks > Wage rates & annual/Public Holiday updates > Employment law updates > Contracts of Employment > Employment Policies > Negotiations with trade unions > Settlement negotiations > Dispute resolutions > Representation on a range of industrial relations committees at both local and national level > Representation at employment tribunal bodies
CIF appoint new Communications Director The CIF has appointed Anne Cleary as its new Director of Communications. Anne joins the CIF from Tesco Ireland where she spent four years. During this time, Anne held leading roles in the Planning and Property Department, Government Affairs, and latterly held the position of Head of Public Affairs. Speaking about her plans for her new role Anne said: ”I’m really looking forward to getting to know our members, listening to their experiences and hearing suggestions for how we can continue to rebuild our sector and its image. “CIF members play a central role in the economic life of towns and cities across the country through the delivery of crucial infrastructure, as well as offices, schools and housing. I plan to work closely with members, branches and associations to drive understanding of the challenges faced by our industry, while also raising awareness of CIF members along with their exceptional achievements.” Anne can be contacted on acleary@cif.ie or 086 0141515.
October 2015 CONSTRUCTION 09
New CIF Regional Director – Conor O’Connell Conor O’Connell has recently been appointed Regional Director for the Southern Region by the CIF. The Southern Region of the CIF covers the Cork, Mid-West, South-East and Kerry Branches. Conor has over 18 years of experience in the construction industry with extensive negotiation skills on behalf of members on a wide range of issues. Before joining the CIF in 2001, Conor worked as an Industrial Relations officer on several high profile projects in the Southern Region. Since then he has worked extensively on industrial/employee relations issues for members and also across a range of other functional areas. Conor brings a wealth of experience to servicing members and the industry in the Region having served as Secretary to the Mid-West Branch as well as other regional associations and is looking forward to representing the CIF and the industry as we begin our slow road to returning to normal levels of construction activity.
New CIF Regional Director – Justin Molloy Justin Molloy has recently been appointed Regional Director for the CIF Western & Midland Region. Justin is a graduate of the Galway Mayo Institute of Technology with over 25 years experience working in the Irish construction industry. Since joining the CIF he has managed the CIF Galway, Midland, North West and Donegal regional branches giving advice and support to members on a variety of issues from procurement and contractual matters to planning and development advice. Justin also represents the views of the members through his participation on a number of regional and national committees and through his work with the wider industry regionally.
Construction Contracts Act moves towards conclusion The recent commencement announcement by the Minister for Business and Employment, Ged Nash TD, for the application process for appointment to the Panel of Adjudicators under the Construction Contracts Act, 2013, is another step to full implementation of the Act. Expressions of interest are now being sought by the Public Appointments Service (PAS) on behalf of the Department of Jobs, Enterprise and Innovation from suitably qualified persons for selection to this new Panel of Adjudicators. Minister Nash will make the appointments following the assessment of suitability of applicants by the PAS. “I am pleased that the Public Appointments Service has, at my request, commenced the application process for persons who are interested in being considered for appointment to the Panel of Adjudicators under the Construction Contracts Act, 2013. I would like to encourage people from
10 CONSTRUCTION October 2015
each of the relevant disciplines to apply,” said Minister Nash said. “I believe that this new adjudication panel should greatly assist those involved in the construction sector to resolve payments disputes in a professional and efficient way.” Section 8 of the Construction Contracts Act, 2013 requires that a member of the Ministerial appointed Panel of Adjudicators must be a person of any of the following descriptions: (i) a registered professional as defined in section 2 of the Building Control Act 2007; (ii) a chartered member of the Institution of Engineers of Ireland; (iii) a barrister; (iv) a solicitor; (v) a fellow of the Chartered Institute of Arbitrators; or (vi) a person with a qualification equivalent to any of those specified in (i) to (v) duly obtained in any other Member State of the European Union.
Minister Nash has recently appointed Dr Nael G. Bunni as Chairperson of the Construction Contracts Adjudication Panel. Work is continuing on the preparations for the full implementation of the Act as soon as possible. This Construction Contracts Act introduces new minimum payment arrangements between parties to a construction contract and will apply to contracts entered into after the commencement of the Act. If a payment dispute arises between parties to a construction contract covered by the Act, either may refer the payment dispute for adjudication, which will then take place within a tight timeframe. If the parties cannot agree on the appointment of an adjudicator, either may apply to the Chairperson of the Construction Contracts Adjudication Panel to appoint an adjudicator from the Ministerial appointed Panel of Adjudicators to the dispute.
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cover
Main Contracting: new contracts & cautious optimism (L-R) Pat Lucey, CECA President, with Tom Parlon, CIF Director General and John O’Shaughnessy, MBCA President, September 2015
Much like the general public, Irish main contractors are used to hearing about the upturn but have yet to feel the benefits in their own pockets. Brian Foley spoke to members of the CECA and MBCA to hear what the sector thinks about the current industry state of play, government forms of contract and much more.
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hen the then CIF President Philip Crampton stood up to address a large gathering of industry professionals at the Public Procurement in Ireland conference organised by the CIF in March 2013, he was in no doubt about the grave state of government contracts. “At a time when the construction sector is suffering from a very low level of activity, public procurement has never been more important for our sector. Yet the industry has to operate with an extremely flawed system,” he said. “Construction projects should be a partnership between the various sides but the procurement system in this country now operates on an adversarial basis. This is damaging the State, construction companies, architects, chartered surveyors and
October 2015 CONSTRUCTION 13
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MBCA President John O’Shaughnessy with the main contracting executive team (L-R) Martin Lang, CIF Director Main Contracting, Orla Brady, Administrator and Alison Irving, Executive Main Contracting
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One thing we need from government is commitment to see it through – not to chop and change
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others.” While the CIF conference framed the conversation around Government contracts the crucial next step was the announcement that a review would take place. That came later in 2013 and on 10th December a CIF delegation led by Philip Crampton attended the formal start of the contracts review with the Government Construction Contracts Committee (GCCC). In his presentation to the meeting the CIF President said the industry was delighted to see the Government move forward with the process and implement the review. “We believe the review will benefit everyone involved – the state, the public and our industry.” The central point made in his speech was fairness. “A system that was meant to be fairer and provide greater clarity has achieved the opposite result.” By December 2014 the results of the GCCC review were published and CIF Director General Tom Parlon was able to declare it as a “very positive outcome” for the industry. Fast-forward to October 2015 and with the imminent implementation of two of the GCCC recommendations, CECA President Pat Lucey says relationships with Government have never been stronger. Speaking before the annual CECA dinner he talks about how the construction industry
was viewed as the problem but now was part of the solution. “The GCCC review is a big win for the industry. Dispute resolution and MEAT have some work remaining but the Bill of Quantities and nominated sub contracts are a very positive outcome.” MBCA President John O’Shaughnessy thinks the changes to Government contracts are “what we’ve been looking for”. “The old contracts were adversarial,” he says. “They contributed to business failures in the construction sector. Now we have a collaborative form of contract that is fairer to both sides. “We have to commend David O’Brien and the GCCC for their work. They delivered on what they promised.” For Paul Stewart, from the well-known family construction firm, the changes to Government contracts are “promising.” The risk transfer is now more balanced, he says, while the private sector remains extremely unfair. “Making the Bill of Quantities the primary reference document for the pricing of public contracts is hugely important,” he says.
Construction Contracts Act
Speaking to members of the main contracting sector, it’s evident the ongoing delay in fully implementing the Construction Contracts Act is a source of frustration.
October 2015 CONSTRUCTION 15
cOver John O’Shaughnessy wonders why the Government can’t announce the commencement date and work back from that? “Again the delay has led to business failures through a lack of cash flow in the supply chain,” he says. “The MBCA is happy about the Act’s introduction, it’s not perfect but issues can be dealt with after its implementation.” One such issue concerning MBCA members is payments terms affected by differentiation between main and sub contractors. As with most people in the construction sector, Pat Lucey is concerned with the delay in fully implementing the Act. “As an Association we fully supported its introduction,” he says, “and we welcome Nael Bunni’s appointment as Chairman of the Panel of Adjudicators.” Paul Stewart says the Act is “important” as it will help prevent abnormally low tendering because, he explains, the contractor knows he has to pay the sub contractor.
Sme SeCTOR
For the SME sector there is continuing concern regarding (a) minimum turnover requirements and (b) the timeframe and often overly specific nature of previously completed projects which are sometimes specified by Contracting Authorities in prequalification/tender documentation. Ken Morley, from M&B Construction, says that as a result of the prolonged downturn in the Civil Engineering (Public Works) Sector many SME civil engineering companies operating in the domestic market are finding it increasingly difficult to meet the tender requirements being set in respect of minimum turnover and recent previous works. “Considering the reduced capital budget and the associated shortage of civil engineering projects It’s no surprise that contractors’ turnover figures have fallen during the recession. Many contractors have been operating at a fraction of their true capacity and in such instances the use of the minimum turnover figure in tender competitions may serve to exclude adequately resourced and experienced companies which although having reduced turnover are in a position to undertake the project. It could be successfully argued that a contractor’s ability to undertake a certain project has more to do with his available resources and the experience of his
personnel than whether or not he meets a minimum turnover figure. “A similar issue arises with regard to the specified timeframe allowed in which tendering contractors are permitted to demonstrate their experience of similar works. The current five or seven year timeframe contained in Public Works Tender Documentation is simply too short. The reality is that over the past seven years there has simply been insufficient work in the various domestic civil engineering areas. Contractors have been unable to replenish their company CVs with recent work and as a result, experienced contractors are being unnecessarily excluded from tender competitions because some of their projects are deemed to be ‘out of date’. “I am of the view that the above tender requirements contribute to the incidence of unsustainable tendering as contractors have no option but to maintain their turnover and previous projects (for tendering purposes) in an environment where there is a significantly reduced market. Regarding a possible solution I feel that that as part of the tender process, an alternative to ‘minimum turnover’ should be considered for the assessment of a contractor’s financial capacity to undertake a project (e.g. by permitting him to demonstrate his available resources). This could be introduced on a temporary basis until some level of normality returns to the sector. The seven year timeframe for previously completed projects should also be extended. These two issues could be addressed with minimal lead in time and at no cost to the State. Such changes would also relieve some of the downward pressure on tender prices which is in the interest of all stakeholders in the industry.”
OpTImISm
“We’ve been talking optimistically but the reality is that for the civil engineering sector optimism hasn’t been translated into work,” says Pat Lucey. Speaking before the publication of the capital works programme he said the lack of visibility of the programme, which had been promised “month after month”, was denting the confidence of the civil engineering sector.
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NOw we have a COllabORaTIve fORm Of CONTRaCT ThaT IS faIReR TO bOTh SIdeS JOhN O’ShaUghNeSSy
’’
“We need to make plans, these projects take huge planning and we need to have visibility.” “Tendering is an expensive business and we need time to focus properly on what is required. A lack of knowledge leads to rushed bids, which is bad for the client and the country. “In the UK they plan projects with longer lead times and they engage properly with the supply chain. A better-prepared construction sector will lead to stronger bids and tougher competition. “One thing we need from government is commitment to see it through – not to chop and change. Be definitive, make decision and stick with it. When they are seen to commit that gives confidence to the market, which will then invest in projects that ultimately will provide value for money so everyone benefits. “If they’re seen not to live up to their
October 2015 CONSTRUCTION 17
‘‘
We’ve been talking optimistically but the reality is that for the civil engineering sector optimism hasn’t been translated into work Pat Lucey
’’
commitments then people will always question lists when they’re published.” “The order books are strong but challenges remain,” says MBCA President John O’Shaughnessy when he is asked about his members’ current state of mind. “Margins remain tight,” he says. “Tender prices went up 5% in 2014 and the same gain this year yet input costs – wages, materials – have also increased.” “While Dublin is booming the regions are flat,” he says. “The capital programme needs to look beyond the capital. From a country perspective most of the FDI work is centred on Dublin. What is the government’s plan for the regions? “The recent jobs strategy is welcome but is not enough.” When asked if he thinks there is a two-tier construction sector, he replies: “100%”. “Many SME’s can’t compete in the Dublin market, while it’s hard to see any pick up in activity on places like Limerick and Cork in the foreseeable future.”
Margins
Paul Stewart says while there is no shortage of pricing for jobs, the margins are “unbelievably tight”. The period to submit tenders has drastically reduced, he says. “The level of detail required is onerous in the extreme. We simply aren’t given enough time.” The situation is worse in the private sector, he adds, saying that clients want everything the “next day”. Pubic sector contracts are now more reasonable than their private sector counterpart, he says. “Construction firms have to invest in bid teams, they’re on the go all the time,” he says. “The stark reality is that if you want to be successful in the industry you have to play the game.” Paul acknowledges there are more projects coming to market but input costs have increased, he says, and with margins so tight there is huge risk involved. “There is a major concern that we will replicate the problems of the past,” he says. “If we compete against each other on wafer thin margins it will become a race to the bottom with the client choosing the lowest price.” Stewart has ceased tendering for schools contracts; such is the company’s concern at the risks involved. “We can’t see how anyone is making money.” “We are continuing to price design & build for schools because it’s seldom the lowest price wins in that scenario.”
Jobs
A growing economy and improving construction sector is to be welcomed, says John O’Shaughnessy, but this
18 CONSTRUCTION October 2015
positivity is tempered by problems hiring professional staff and apprentices. “At present it’s difficult but not impossible to hire site managers and quantity surveyors. This will become increasingly difficult,” he says. “Asking people to move back home is not as simple as it appears. I have family in the construction sector that live abroad. They’re worried about coming home, angry at what happened during the recession and fearful our recovery remains fragile. “The lack of apprentices is a bigger problem, particularly in the wet trades,” he argues. “The Government hasn’t helped, there is a complete lack of support for employers who want to take on apprentices. There has to be some sort of incentive, instead of a situation where year four and five apprentices have to pay their own college fees, which usually is passed on to the employer.” John mentions the pilot scheme in the South East aimed at increasing the number of apprentices in CIF member firms. “A failure by Government to tackle this issue could impact on growth,” he warns.
Welcome
The establishment of an informal advisory group with Irish Water is a welcome development, says Pat Lucey. “It gives us a forum to understand the terms and conditions they are applying to impending projects. We welcome this opportunity and engagement with Irish Water, which will serve to better inform our members and ultimately this knowledge will help deliver value for money projects. “This type of advanced planning will also allow member firms to replenish their plant stock, which hasn’t been upgraded in over a decade.” C
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We welcome Nael Bunni’s appointment as Chairman of the Panel of Adjudicators
’’
New South Glasgow University Hospital
Mercury making healthcare strides in Glasgow The recently completed New South Glasgow University Hospital is the culmination of a project started in 2009 when the hospital went out to tender. Brian Foley spoke to Mercury Engineering’s UK Director about the experience of working on such a large-scale project.
20 CONSTRUCTION October 2015
Excellence in Construction
F
or Mercury Engineering, Glasgow represented the biggest healthcare project the company had ever worked on. According to Mercury UK Director Ed McIntyre, the hospital was a massive challenge but one that, ultimately, was successfully completed ahead of schedule. The project comprised two buildings, a blood laboratory with an M&E package worth €27m and the main hospital building with a €220m M&E contract. The hospital is designed for 1,500 beds, including 250 dedicated children’s beds and 100 high dependency beds. “Big enough,” is Ed McIntyre’s understated description of the entire project.
Tendering
Before construction could commence bidders had to endure a long tendering process, known in the UK as ‘competitive dialogue’. “NHS Scotland was the client and tender meetings would take place three times per week for nine months,” says Ed. “There would be over 30 client representatives at these meetings, which would last over three hours.” Competitive dialogue essentially means that bid teams are encouraged to take the client design and “make it a better design”. “There is a constant dialogue during the bidding process, refining the plans to a stage where the client says ‘we’re not
unhappy’,” says Ed. At that stage the client withdraws from dialogue to decide the winning bid. For Glasgow, price was never the main criteria for the client when selecting the winning bid. “Thirty per cent was price,” says Ed, “while 70% weighting was placed on the quality of the team and other deliverables.” Securing the contract through this form of tender process was exhausting, says Ed, but helped develop strong relationships with both the client’s team and designers, which was of great benefit during the design development and construction phase of the project.
Local strategy
At peak Mercury had 650 people working on the Glasgow project, 108 of which were directly employed by the company. “The contract included a community engagement clause, which meant hiring long-term unemployed people, as well as using local suppliers and sub contractors,” explains Ed. The sheer size of the project worried some people, he admits. The biggest challenge was encouraging SME sub contractors not to be overawed by the scale of the hospital. “Hospitals can be tough for small contractors,” he says, “but once you convinced them of how manageable the project was they were fine. Ultimately the project was delivered months head of schedule.”
October 2015 CONSTRUCTION 21
Excellence in Construction Healthcare background Mercury has over 30 years experience in the healthcare sector. To date the value of its healthcare projects exceeds €500m. The company says its primary focus is on the Ireland and UK markets though it has completed healthcare projects in Poland and the full ‘turnkey’ design & build 23,000m2 RCSI Medical University in Bahrain.
Obviously for such a project the sequence of build was a huge project management challenge. For the M&E contractors it meant installing services in a 165,000m2 hospital. “To put that in perspective,” says Ed, “Mercury had worked on the Peterborough hospital, which was 100,000m2. “This was a new challenge for us but you bring the accumulated knowledge from all previously completed projects to bear on the new job. As we like to say, every day is a school day.”
Lean in Glasgow
Glasgow also saw Mercury ramp up its reliance on modularisation of services. “To give you an idea of how big Glasgow was, in Peterborough we built 3,000 modules off-site, in Glasgow we hit over 8,000,” says Ed. “Lean was a huge winner for us in Glasgow,” he says. “The traditional method of delivery – ordering, storage, moving – is
not lean in the slightest. Using modules (the modules were six metres wide x two metres long x 1.1 metres deep), where everything is on wheels, means the finished product can be moved straight into position. “We were installing 45 to 50 modules per week based on the main contractor handing over 270 linear metres of corridor. Sometimes we would receive less ‘corridor’ so we could build up our stock of modules ready for when more of the hospital could be delivered. “Lean gave us certainty and eradicated double and triple handing. The reduction in wastage was also impressive.” Off site fabrication was located in Newcastle. “For Lean to work you need to keep transportation costs to a minimum so Newcastle worked well in that respect.”
Future
The intelligence value picked up from a project such as Glasgow is “massive” says
Ed. With Glasgow being such a largescale project the ‘takeaways’ are especially important. “Already one of the teams we had working there have moved on to Edinburgh Children’s Hospital,” he says. This healthcare knowledge takes time to accumulate. “In 2006 we received an invitation from Brookfield Multiplex to work on Edith Cavell Acute Hospital, Peterborough ,” says Ed. “Back then we considered Peterborough at 100,000m2 a big project.” Peterborough was the first time Mercury used off site modular construction. Encouraged by what they learned from the process, modular build was introduced into the Mercury build philosophy, to the stage where it was central to the success of the Glasgow project. “We have the knowledge and, with 50 Mercury engineers with both Glasgow and Peterborough practise, we have the experience,” Ed concludes. C
“We’re more focused on the quality of our delivery, rather than simply building a large geographic presence” Eoin Vaughan, CEO of Mercury Engineering talks to Brian Foley about positioning the company for future opportunities.
I
n the top job for a little over 12 months, Eoin Vaughan admits his first year in the role has been “challenging”. One of the main challenges he refers to was the refocusing of the Mercury business model. “We’ve spent considerable time looking at how the business works,” he says. We have clear direction of where we see the company in five to seven years.” Mercury will shortly publish Mercury 2021, which is the company’s strategic vision for where and what we want be by 2021. According to Eoin the business is
October 2015 CONSTRUCTION 23
Excellence in Construction now more focused on the client, developing lasting relationships and strategic partnerships, one item Eoin is keen to point out is that approximately 60% of our projects are new works for existing clients, with elements of this work coming from the client developing its business in a new region, Mercury will also enter the new region to support their client under a new global deployment strategy. “We’re more focused on the quality of our delivery, rather than simply building a large geographic presence,” he says. “We are more sector focused. “It’s for these reasons we have developed our Mercury hub strategy, with Dublin as the centre and satellite hubs in the UK and Europe.” Eoin explains that each hub has its own specialist expertise, to be shared with the rest of the company. “For instance, our UK hub has excellent healthcare knowledge built up over the past decade on projects like Edith Cavell Hospital, Peterborough and New South Glasgow. Similarly, our European hub has strong retail and data centre experience, each area has a naturally developed niche.” “We want to utilise that knowledge on a group wide basis through developing Mercury Share, a portal where project teams can share their knowledge. As we grow the knowledge base will replace what might be termed the location base.” The company hopes that this structural realignment will help staff make better decisions faster. For instance, an engineer located in an isolated project with a particular problem he is having difficulty solving, can access the knowledge of his colleagues through Mercury Share. “There is a massive cultural shift about to take place in the construction sector,” says Eoin. “Ownership of knowledge will change, so we as an industry will be more open source, focused on solving problems instead of hording information.” He cites the example of NASA, who had a complex engineering problem to solve. Instead of giving the task to its engineering department to solve, which would cost millions, NASA uploaded the problem to the cloud and offered a $25k reward to anyone who solved the problem. Over 720,000 solutions were submitted; the two best were implemented at a cost of a mere $50k. “We’re moving to a more BIM‐centric industry, “says Eoin. “Problems will be uploaded to the portal and BIM specialists in, a different sector or region can assist to solve the issue. That’s the future.” Eoin uses BIM as an example in this situation as this is one area Mercury have had huge
development in over the past 24 months, from the experience gained in projects in Europe and the UK to the situation where we had a requirement of 100 BIM Modellers for a semiconductor project in Kildare, we were faced with difficult issues with both the lack of experienced BIM modellers in the country and to how we could best adapt the BIM process into the company, from knowledge gained in the UK and trips to the US we commenced a training programme with trades people in training them into BIM modellers with the advantage being that they already have site experience of how systems work and go together, these along with BIM technicians have developed into an extremely efficient and effective BIM team with a good balance of technical knowledge and experience. To place this cultural shift in context the Mercury CEO points out that as recently as ten to 15 years ago the dynamic of working internationally was very different. “I remember my first international project in Sweden in 2005,” he says. “Everything from moving people abroad to fabrication and the supply chain were huge issues. Today we have 20 live projects around Europe, we have fabrication plants in Newbridge and Poland and a robust supply chain throughout the continent. “There is criticism that the construction sector is slow to adapt to change, but I think from our viewpoint there has been massive change in a short period. If the pace of change over the next five years is as steady as the past 15 years I’ll be happy.” Healthcare will play a big role in Mercury’s future, says Eoin. The company cut its teeth on Irish hospitals like Tallaght and St Vincent’s in Dublin, and Cork University Hospital. “The people who worked on those projects moved to the UK and with the experience gained at Glasgow and Peterborough we feel we’ve taken five or six steps forward with our healthcare expertise, in particular in the development offsite fabrication of services modules, coordination and value engineering. “We can transfer key staff back to Ireland when required,” says Eoin. “We have three strong hospital teams coming out of the New South Glasgow project, one of which is now in Edinburgh working on the new hospital facility.” To the outsider there is a sense that the experience gained by Mercury over the past 15 years which has placed the company in a strong position. Eoin stresses that the momentum enjoyed by Mercury is a result of the hard work of staff both past and present. “It’s not as if this happened overnight,” he says.
‘‘
There is a massive cultural shift about to take place in the construction sector
’’
He also cites the experience gained working with the FDI sector in Ireland. “We took the knowledge gained from those projects and brought it overseas,” he says. “The model we developed in Ireland impresses our European clients.” The FDI/ IDA clients are key to our success. Eoin is an enthusiastic supporter of working abroad for at least part of your career. His own experience includes spending seven of the last ten years in Poland and the Middle East. Mercury currently have approximately have 40 graduates working abroad as part of the Mercury Graduate programme, as part of the 2 year programme all graduates will complete some works overseas where possible to gain experience in varying regions but more importantly on the various project types. Mercury believe that the development of the graduate programme and also the support that is given to both staff and tradespeople to further their education is key to developing the future of the business,I myself having benefited from this through completing an MBA and an Executive Management Leadership Programme from Harvard Business School in the last six years. “From travelling I see that Ireland produces the best construction tradespeople and professionals,” he says. “You just have to leave here to realise that!” C
October 2015 CONSTRUCTION 25
PT&C Committee: At the heart of policy development Developing a unified approach to difficult and complex issues is the primary impetus of the Procurement, Tendering and Contracting Committee (PT&C). Brian Foley spoke to committee members about its role within the CIF.
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nity of message is crucial when negotiating with government. Just ask Paul Morrell, who for three years was the UK Government’s Chief Construction Adviser. Speaking to a CIF conference in Dublin in 2013 he said a ‘one voice’ approach was critical. “If you can’t agree on what your message is then you’re wasting our time,” he said. It’s this ‘one voice’ strategy that is the central ethos of the PT&C Committee within the CIF. “It’s the most important committee in the CIF in terms of policy development,” says Sean Downey. The CIF Specialist Contracting Director explains that the PT&C committee, given the background of its members, “channels opposing views on issues and comes to a consensus that everyone can support”. He says there is a “good spread” of interests represented, with members always “given space given to reach consensus, which is a tribute to the chairman”. The key to its success is that “everyone gets a result, not just one side”. The Chairman of the committee is Philip Crampton, who has held the position since the PT&C Committee was established in 2009. He describes the work of the committee as a “wide ranging remit”. Over the last number of years the Committee has established various sub-committees which have looked at particular policy areas, most notably the review of the Government Construction Contracts, with several submissions made to the GCCC on this matter and multiple meetings both bilateral and at stakeholder group level. Changes to the contracts are imminent and the PT&C and subcommittee has put huge effort in towards this end. “We’ve gone from a point where there was little or no dialogue to the present
26 CONSTRUCTION October 2015
PT&C Chairman Philip Crampton situation where the GCCC welcome our involvement and we viewed as part of the solution process,” he says. “The PT&C helped that happen. “The committee certainly opened channels to civil servants and ministers.” As Chairman, Philip says it’s his role
to help unify the committee. “I don’t like people doing solo runs, we present our decisions as one unified committee. That can mean it takes time to reach consensus but when we do it takes a lot to ‘turn the ship around’.” Strong opinions are voiced during discussion phase and Philip readily admits there is no point in having “shrinking violets” on the committee. “We don’t have to reach agreement all the time, but it’s vital that individual sector interests refrain from lobbying on their own behalf,” he says. “In that regard I think we’ve been very successful.” The Committee has made submissions to the Office of Government Procurement in relation to the transposition of the new EU Procurement Directives, which will have a huge impact on procurement into the future. One of the issues considered by the PT&C Committee, the implementation of social clauses in contracts, will be addressed by the Regulations implementing the EU Directives. In further work, the PT&C established a sub-committee to review and modernise
Tony O’Leary, John Craddock and Paul Stewart, PT&C Committee members
Frank Kelly making a point at a recent PT&C Committee meeting
PT&C
PT&C Deputy Chairman Jim Curley
Martin Lang, PT&C Committee Secretary, at a recent meeting the existing sub-contracts, with the Domestic Sub-Contract already finalised and the NN Sub-Contract almost complete. Other forms of sub-contract will also be addressed once the main forms have been updated. There is also an ongoing membership of a liaison committee that meets with representatives from the engineering, architects and surveyor bodies to discuss private sector contracts. Government contracts dispute resolution is now on the agenda but only at the “discussion stage”. Issues with Irish Water and NAMA make for a busy schedule when the committee meets every six weeks, “or more frequently if the needs arises”. The committee recently appointed Jim Curley as Deputy Chairman. “The two of us have the same approach,” says Philip. The volume of work the committee tackles is only possible by the “fully committed” executive team led by Secretary Martin Lang, CIF Director Main Contracting.
Background
The PT&C Committee was originally called the Below-Cost Tendering Sub-Committee, also chaired by Philip Crampton, when it initially began in 2009 and was essentially set up to look at the causes of below-cost tendering in the industry and ways in which this could be avoided.
“The work of the PT&C committee is absolutely central to the successful coexistence of main contractor, sub contractor and specialists associations all within the one umbrella of the CIF. The contractual relationship between the main contractor and sub contractor levels of the supply chain, by its nature, can lead to disparate or opposing objectives and over the years the PT&C committee has always been successful in finding common ground that is in the best interests of all constituent Associations of the Federation.” • Ger O’Leary, Committee member
The committee was looking at the possibility of legislation to ensure payments to sub-contractors, akin to the UK Housing Grants and Construction Regeneration Act 1996 when Senator Quinn presented his draft Construction Contracts Bill with
Members of the PT&C Committee executive team with Deputy Chairman Jim Curley (from left) Alison Irving, Orla Brady, Gillian Ross and Sean Downey, CIF Director Specialist Contracting assistance from Sean Gallagher. The subcommittee then became closely involved with Senator Quinn on this matter and the Construction Contracts Bill became the first focus of the committee. It evolved into the “Procurement, Tendering and Contractual Matters” Committee of the CIF following a reorganisation of the sub-committees of the Executive Body. The PT&C Committee consistently addresses issues brought to it by constituent Associations of the CIF, such as the question of the possibility of the introduction of Project Bank Accounts. This matter has been addressed by way of a Breakfast Briefing to members, engagement with the Irish Banking and Payments Federation, and discussions with other nations Federations on how PBAs operate. It has also engaged with NAMA in relation to the form of contract to be used on NAMA procured projects. C
“There is no doubt that policy documents developed through the PT&C Committee had a huge impact on the GCCC review and the Construction Contracts Act. The Committee played a significant role in getting the government forms of contract improved. For those reasons I think it’s the most important committee within the CIF.” • Paul Stewart, Committee member
October 2015 CONSTRUCTION 27
legal
Are Accident Reports Privileged? The CIF Safety Committee recently reviewed the issues of data protection and privilege relating to litigation that may arise following an accident at the workplace. In order to enlighten members on this complex area, the Committee asked Clare Cashin, a partner with Phillip Lee Solicitors to address the issue. If an injured employee requests details of their accident report what are their entitlements and what are the restrictions that can be placed on the release; most importantly what is the law and reasoning behind all those entitlements and restrictions? Employers maintain reports of accidents which occur at their work place for many reasons; some reasons which spring to mind are the orderly administration of a business, compliance with health and safety legislation, HR procedures, compliance with insurers’ guidelines or to simply have records to hand should future litigation arise. The Safety Health and Welfare at Work Act 2005 (the 2005 Act) requires accidents and dangerous occurrences to be reported to the Health and Safety Authority (HSA) but beyond that standardised IR1 online form, employers do tend to maintain
separate accident reports If a question arose as to what the dominant purpose as among all those reasons for maintaining records was, what would be the answer? This is a consideration which businesses regularly have to face from a legal stand point, in order to decide if privilege applies.
Data Protection Acts 1988 and 2003
The Data Protection Acts 1988 and 2003 define personal data as data relating to a living individual who is or can be identified (either from the data, or from the data in conjunction with other information that is in or is likely to come into the possession of a data controller). Bearing this in mind Section 4 provides a right of access to personal data. It states that an individual who makes a request
in writing shall be informed by the data controller whether the data being processed includes personal data (as defined above) and if it does, be supplied with a description of the personal data (together with the categories, the purpose and the recipients) and the information constituting the personal data (together with other aspects such as the source of the data and the logic involved in the processing of same). Section 5 of the Act facilitates a restriction on the right of access. The entitlement set out in Section 4 above does not apply to personal data kept for the purposes of preventing, detecting or investigating offences for example. Other restrictions set out in Section 5 which one could foresee being applied to accident reports (and restricting their release) are information kept for the purposes of discharging a function conferred under an enactment,
October 2015 CONSTRUCTION 29
legal
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A privileged document is one which is immune from prosecution.
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of which a claim for privilege could be maintained.
Privilege – general principles
A privileged document is one which is immune from prosecution. The reason why the law recognises privilege and allows documents this protection is because it is seen to assist the administration of justice. The courts accept that one should be able to seek and receive legal advice and prepare for litigation in confidence and so they allow certain communications to be protected. Privileged documents fall outside the usual requirements of disclosure. There are various of types of privilege (such as executive privilege, journalistic privilege, without prejudice privilege), but for the purposes of considering accident reports, legal advice privilege and litigation privilege which are the two likely to come into play.
Legal advice privilege
information consisting of an estimate of damages to be paid or information in respect of which a claim for privilege could be maintained in proceedings in a court. An accident report (or at least some sections of it) is likely to constitute personal data i.e. a living individual is identifiable from it. Accordingly an individual would typically be entitled to an accident report relating to their own incident. This has implications and consequences for subsequent litigation so it is important for employers (and employees) to be alert to the entitlements and restrictions pertaining to production.
Section 5 restrictions
Accident reports are required for production pursuant to Section 4, unless they fall within the exemption of Section 5. Some of the restrictions in Section 5 which would commonly apply to accident reports deserve further examination. One restriction in Section 5 is information kept for the purposes of discharging a function conferred under an enactment. Section 8(2)(k) of the 2005 Act requires an employer to report accidents and dangerous occurrences to the HSA. To that extent form IR1, the prescribed form could fall within this restriction so it is the broader separate reports developed by employees beyond the statutory report form which we consider below. However, the most popular ground for declining release is because an employer maintains that it is information in respect
Legal advice privilege attaches to documents which contain actual legal advice or a request for legal advice. This privilege does not extend to mere legal assistance such as administrative tasks carried out by a solicitor
Litigation privilege
Documents attract litigation privilege if they are created with a dominant purpose of actual or contemplated litigation. The dominant purpose test is important. If a document is created for more than one purpose then unless the dominant purpose is litigation then privilege will not attach. One can see how this could easily happen in relation to an accident report. It needs to be very clear that the report is being created for the purposes of contemplated litigation if privilege is to attach. Where the report is being created for numerous purposes (eg. periodic insurance reporting) then one can foresee an argument that the contemplated litigation was not the dominant purpose; one is commonly challenged to decide the precise date at which litigation was in fact contemplated. These are just samples of the myriad of challenges one faces in attempting to maintain privilege. Knowing the potential challenges can assist in planning to avoid problems. While one can take steps (by understanding the permutations above) to attempt to assert privilege, it will ultimately be a subjective test based on their context and what was happening precisely at the time the document was created including the mindset of the person creating the document.
Waiver of privilege
Privilege can be lost where a party has
waived that privilege either by choice or inadvertently. If the person who “holds” the privilege releases that document, by exhibiting it for example, one waives the privilege which attaches to it. Accordingly if privilege attaches it needs to be guarded carefully.
Privilege
The context of the document dictates whether privilege attaches. Sometimes people think that all communications between the client and solicitor are privileged but this is not so; whether a document is privileged depends on its context. Attaching headings such as “privileged” or “privileged/created for legal purposes” are not decisive. It is the actual content of the document and the context which decides whether it is privileged or not (as opposed to any title or phrase which accompanies it). That said, the heading “privilege” can assist, but only to the extent that it assists the consideration of context. The attachment of a title of “privileged” can be helpful and is indeed advisable where one intends to claim privilege. However, it is equally important to understand that it is not decisive but privilege will always depend on the content and contexts.
Conclusion
Accident reports are likely to contain personal data which an injured employee is generally entitled to access. This is subject to limited exceptions. If an employer wishes to maintain privilege over that document, the boundaries of privilege need to be understood. While the privilege which attaches to a document must always be considered on an individual basis (testing the context and content of each individual document) understanding those boundaries can help employers to plan systems and help avoid conflict when it comes to release. C Clare is a partner in law firm Philip Lee. Clare practices in both contentious and non-contentious construction law, advising employers, contractors, designers, public authorities and private entities. She specialises in dispute resolution and health and safety law. She routinely provides regulatory advice on procedures to be adopted in abiding by the statutory regime imposed by the Safety Health and Welfare at Work Act 2005 and all regulations thereunder. Clare lectures in Trinity College Dublin and University College Dublin. She sits on the committee of the Health & Safety Lawyers Association of Ireland.
October 2015 CONSTRUCTION 31
CIF Annual Conference 2015 Date: Thursday 1st October Location: Croke Park, Dublin
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CIF annual conference
Keynote speaker:
Our keynote political speaker is Minister for Public Expenditure and Reform, Brendan Howlin. His intervention is particularly timely, coming just before the announcement of Budget 2016 and after the announcment of the Public Capital Expenditure Programme, which is of huge importance to our sector.
FDI:
For the first time, we will be hosting a panel discussing the importance of Foreign Direct Investment (FDI) to Ireland, and the role that we in our industry must play in order to ensure that we continue to attract top FDI companies to our shores. This panel will feature some of the major FDI players in Ireland today, and will be moderated by Mary Buckley, Head of Corporate Operations & Regional Development, IDA Ireland.
Housing:
The second panel will feature a discussion on the housing crisis and how to overcome impediments to building. We expect a lively discussion to ensue with Dermot O’Leary of Goodbody Stockbrokers; Hugh O’Neill of the Irish Home Builders Association, and Tom Dunne from the School of Surveying & Construction Management, DIT, all on the panel.
Hurling legend:
We are also delighted to announce that this years conference will be wrapped up by Kilkenny Hurling legend, Henry Shefflin. Henry has won 10 All Ireland medals as well as 11 all-star awards. He is widely regarded as one of the greatest hurlers in the history of the game and is sure to have plenty to say about setting targets and achieving them! C The CIF Annual Conference is sponsored by Maples and Calder
October 2015 CONSTRUCTION 33
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CIS STATS
Construction: the numbers game
Irish construction activity remains strong as 4050 construction projects with a total value of €19.8 billion have been added/updated to CIS Online Database in the last 100 days
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tarting with the transport sector, plans were granted on the 9th of September 2015 for the €850m Apple Data Centre in Athenry, Co. Galway. In Meath, the €200m Facebook data centre is currently on appeal with An Bord Pleanála with a decision expected to be issued in December 2015. In Monaghan, tenders are expected to be sought from building contractors in September/October 2015 for the €40m Production Combi Lift Facility Development. In the civil sector, main works are expected to commence in Spring 2016 on the €220m N25 New Ross Bypass PPP Scheme and main works have commenced on site on the €91m Cork Lower Harbour Main Drainage Project. This project has an expected duration of 17 months. The NDFA Courts Bundle comprising of seven courthouse developments is expected to commence enabling works in Q4 2015. Construction output in the residential sector remains strong with the commencement of several major developments. Work has commenced on Phase 1 of a €22m residential development in Greystones, Co. Wicklow and on-site work has also started on a €10.5m residential development in Tramore, Co. Waterford. Planning permission was upheld by An Bord Pleanála for a €41m mix-use and student accommodation development in the Newmarket area of Dublin city. Looking to the medical sector, tenders have been sought for works contractor and works specialists in relation to the €650m National Children’s Hospital, Dublin. Work is due to commence imminently on the €7.7m hospice extension at Our Lady’s Hospice
In the commercial sector, enabling/ demolition works are expected to commence in September/ October 2015 on the €150m Boland’s Mill Development in Harold’s Cross, Dublin. In the education sector, upon recent planning approval, tenders are hoped to be sought from contractors before December 2015 for the €10m Post-Primary School Development in Kingscourt, Co. Cavan. Suitability Assessment Questionnaires have been issued for the €12m Special School project in Enniscorthy, Co. Wexford. In the commercial sector, enabling/demolition works are expected to commence in September/October 2015 on the €150m Boland’s Mill Development and plans have been recently granted for the €27m mix-use development at City Quay in the Dublin Docklands. Plans have recently been submitted to Dublin City Council for a €111m Office Building in the North Lotts Strategic Development Zone (SDZ). Plans have recently been submitted to Dun-Laoghaire Rathdown County Council for a €120m Office Building Development in Sandyford Office Park. Finally, in the sports sector, a main contractor is expected to be officially appointed in September/October 2015 for the €67m Páirc Uí Chaoimh redevelopment and tenders are expected to be issued to the select list in September/October 2015 for a new €10m library building at the University of Limerick. CIS Online is designed to let you dictate the criteria for your desired project leads based on what construction sectors you’re focused on as well as location, project stage and value range so take a FREE 7 day trial today and start experiencing the benefits. *Note* This CIS Project Information was accurate on 14th September. Visit www.cisireland.com for the latest information on their status. C
October 2015 CONSTRUCTION 35
pensions update
Tax relief and your pension
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Contributing to a pension is a very tax efficient way to save for retirement. The tax relief available at your marginal rate effectively reduces the net cost of your contributions which is beneficial to both your fund and your pocket, writes Susan O’Mara.
f you are a PAYE employee and a member of a pension scheme, this can all be arranged for you through your company payroll. Once you have elected a sum to contribute, the tax relief can be applied at source. Tax relief applies to any regular member contributions that you make that are defined in your scheme and any additional voluntary contribution (AVC) your wish to make. For example, if you decide to make an AVC contribution of €200 and you pay tax at 40%, your take home pay will only be reduced by €120. A €200 investment costing you €120 is a great deal don’t you think? The 31st October 2015 is the deadline for making a pension contribution and backdating it for tax relief purposes to the previous year (2014 relief can be claimed at that years marginal rate of 41%). An extension to this date applies if returns are made online, and this year the final date for online returns is 12th November 2015. For employees, backdating contributions to the previous year will mean physically making an AVC to your pension provider and receiving a tax rebate from the Revenue instead of the payroll at source option. This is because all income tax would have already been paid in full for 2014 via the PAYE system. If you are self-employed, making a pension contribution prior to the tax deadline of 31 October will ensure that you pay less income tax. The pension contribution should reduce not only your final income tax liability for 2014, but also your preliminary income tax bill for 2015.
Are there limits?
The tax relief system is of course not without its limits. While the reliefs are very beneficial, they only apply up certain percentage of income, which is dependent on your age. The table below outlines these limits: Age Under 30 Age 30 to 39 Age 40 to 49 Age 50 to 54 Age 55 to 59 Age 60 & over
% of Remuneration 15% of Remuneration 20% of Remuneration 25% of Remuneration 30% of Remuneration 35% of Remuneration 40% of Remuneration
It is important to also note that the maximum earnings limit from 2015 is €115,000. You may only claim tax relief up to this earnings limit. There is a maximum Revenue-allowable total pensions fund on retirement.This is known as the Standard Fund Threshold (SFT). From 1st January 2014, the maximum pension fund allowable for tax relief purposes has reduced from €2.3 million to €2 million (this maximum amount includes any pension benefits already taken together with pension benefits yet to be taken). The maximum applies to the combined value of all pension provision held for an individual.
Taxation of investment growth
Contributions to pension arrangements are normally invested in funds that have potential for growth above inflation. However the idea is not only to beat inflation, but to increase the size of your fund. These funds are made up of stocks and shares, property, bonds and other types of asset classes from time to time. To this end, another valuable taxation relief applies to your contributions as these funds are allowed to grow tax free in the pension scheme. There is no tax applied to the growth in your pension fund. If we compare this to Direct Investments in shares and property, which are subject to tax at 25% on income annually and 33% Capital Gains Tax at the end of the investment or life assurance investment bonds which are taxed at 25% on the growth on each eighth anniversary.
Taxation of retirement benefits
While you receive the tax reliefs as set out above and they will help to enhance the overall size of the benefits available to you at retirement, your pension benefits are subject to tax at retirement. After a portion is paid to you as a tax free lump sum, the balance of any pension you receive will be subject to income tax under the Pay As You Earn (PAYE) system and may also be subject to the Universal Social Charge. However, you will be entitled to your tax credits to offset this. Talk to your financial adviser today about making a contribution before the 31st October 2015! C For further information regarding saving for your retirement please contact Susan O’Mara at: susan@milestoneadvisory.ie Phone: 01-4068020 Milestone Advisory Limited t/a Milestone Advisory is regulated by the Central Bank of Ireland
October 2015 CONSTRUCTION 37
Claiming capital allowances – not as straightforward as you might think Claiming capital allowances allows for the full write off of the qualifying expenditure on plant and machinery (“P&M”) over a period of eight years at 12.5% per annum, writes Dominic O’Shaughnessy. Where expenditure is incurred on certain energy efficient equipment, accelerated capital allowances in the form of a 100% write off may be claimed in the year when the item of plant first comes into operation. Qualifying capital expenditure on P&M may be used to reduce one’s income tax or corporation tax liability. Given that corporation tax on rental income is taxed at the higher rate of 25%, availing of capital
allowances to reduce profits arising from rental income can be hugely beneficial. If there is insufficient income, unused capital allowances can be carried forward indefinitely and used to shelter future taxable profits. Those who may avail of capital allowances on qualifying expenditure include: • property developers developing new buildings, retro-fitting or renovating
existing buildings; • landlords / owner-occupiers carrying out refurbishment or fit-out projects; and • tenants who carry the burden of ‘wear and tear’ of qualifying P&M.
Where does the complexity arise Definition of “plant”
“Plant” is not defined in legislation. Reference should therefore be made to the extensive body of case law. Whether an item qualifies as plant may be determined by: • reference to the facts; • the nature of the trade; • the function of the item in the trade; • whether it forms part of the setting; and/or • whether the building itself would be habitable without the item under consideration. For instance expenditure on a mural hanging in a hotel lobby has been determined to qualify for capital allowances. The same mural hanging on the wall of a tax advisor’s reception would not however qualify. The hotel lobby mural is deemed to provide a function in contributing to the
38 CONSTRUCTION October 2015
legal
atmosphere of the hotel.
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Identifying one’s entitlement to claim capital allowances is generally determined by who bears the burden of wear and tear.
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Burden of ‘wear and tear’
Identifying one’s entitlement to claim capital allowances is generally determined by who bears the burden of wear and tear. Determining where the burden of wear and tear lies is important as capital allowances cannot be claimed by both the lessor and lessee on the same item of plant. This is a complex issue and may hinge on: • the leasehold term; • the design life of the plant; • the wording in a leasehold agreement; and • the condition in which the plant is to be returned at the end of a lease. A lease agreement may state that the items of plant must be maintained, repaired and, where necessary, replaced at the end of the lease. Notwithstanding the landlord incurred the capital expenditure in installing that plant, the burden of wear and tear appears, at first glance, to rest with the lessee and therefore the lessee may be entitled to the claim capital allowances on that plant. However given that the minimum design life of many plant is 15 years, lease terms of less than this duration, or containing break clauses within this period, could undermine the lessee’s entitlement to claim wear and tear allowances. This is on the basis that the plant is unlikely to require replacement within the term of the lease. This is a grey area and guidance should be sought through case law in such circumstances. Particular care should be taken in drafting the wording in the lease agreement to mitigate the potential for conflict to arise.
Where errors may arise
A Tax Depreciation Report (“TDR”) identifies and quantifies qualifying capital expenditure on P&M and if properly executed can optimise one’s entitlement to capital allowances. A claim for capital allowances is potentially a valuable asset. As such, Revenue is active in auditing claims in this area. There are a number of pitfalls which may inadvertently weaken the claim, such as: • a lack of sufficient documentation in supporting a claim, casting doubt over its eligibility and impacting its ability to withstand Revenue scrutiny; • an excessive claim leaving one open to payment of back-taxes due, interest, penalties and, in extreme cases, publication in the list of tax defaulters; and • incorrectly treating certain types of expenditure resulting in inadequate claims and under-claiming of allowances to which one is entitled.
Suggested steps in preparing a comprehensive TDR
There are various stages involved in preparing a TDR including: • reviewing the facts and determining where the entitlement to claim rests; • attending meetings with the client’s representatives and various design team members; • reviewing the Bill of Quantities, construction drawings and specifications; • identifying any issues which could reduce the claim such as the presence of a sinking fund, the availability of grants, where the burden of wear and tear rests, etc.; and • applying relevant case law to the facts. C Dominic O’Shaughnessy is a Chartered Engineer CEng MIEI and Chartered Tax Adviser CTA AITI. He previously worked as engineering director in a multi-disciplinary consultancy. He currently acts as Chartered Tax Consultant in William Fry Tax / Taxand Ireland. William Fry Tax specialises in providing practical and concise taxation advice to the corporate and construction sectors in general. William Fry Tax is, exclusively, Taxand Ireland. With more than 400 tax partners and over 2000 advisers in nearly 50 countries, Taxand is the world’s largest independent organisation of tax advisers to multinational businesses.
October 2015 CONSTRUCTION 39
news extra
‘Generation of investment’ required to solve housing crisis A generation of investment is required in order to reduce the waiting lists for social housing. That’s according to the Irish Council for Social Housing (ICSH), which held its national conference recently in Tullamore. Speaking at the conference, Donal McManus, CEO of the ICSH, called on the Government to embed social housing as a long-term policy priority. “We must build acceptance of social housing as a public policy priority that requires investment year on year – in the same way as education, health and other key public services do,” he said. “The status of social housing was downgraded in the 1990s, when policymakers began promoting private home ownership over other forms of housing. The sector has failed to recover since. “In the intervening years, investment in
social housing was – unfortunately – often linked to short-term electoral cycles. The results of such short-term policymaking are now clear: we have in the region of 100,000 households on housing waiting lists, a growing homelessness problem, and a severe shortage of suitable accommodation for families throughout Ireland. “These are not problems that can be solved overnight. It will take a generation of investment and long-term planning to tackle the challenges now faced by the housing sector.”
Three steps to recovery
Mr McManus outlined three key steps to address current housing challenges in a sustainable way: 1. Increase supply. According to the ICSH, the commitments made in the Social Housing Strategy to supply 6,000 homes per year must be
implemented as speedily as possible. Implementation of the Strategy must be facilitated and rigorously monitored to ensure targets and commitments are being met, the Council said. 2. Reform the private rented sector. The ICSH wants to see rent supplement caps brought into line with the private rental market, and rent limits kept under review every six months to ensure fluctuations in the market are addressed. Mr. McManus also highlighted the need for stronger security-of-tenure measures so that people do not become homeless for economic reasons. 3. Build political and cultural acceptance that strategic investment in social housing is needed every year, and that social housing is an essential public service.
Open day at Kilsaran Ballinclare plant Kilsaran held an open day for invited guests at its new plant in Ballinclare, Wicklow, last month. The company has invested over €5m in the plant since it was acquired in 2014. Kilsaran is a family run business which was set up by the McKeowns over 50 years ago.
October 2015 CONSTRUCTION 41
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SCSI calls for National Housing Authority A new report commissioned by the Society of Chartered Surveyors Ireland has called for the establishment of a new National Housing Authority to implement, direct and co-ordinate housing policy and strategy.
T
he author of the report, Tony Foley from DCU, said that given the current housing situation the primary focus of the Authority had to be on implementation. “The housing market has long lacked official national coordination,” he said. “The Housing Authority would provide this missing link and ensure that plans are acted on. For example the housing section of the Government document Construction 2020 states that ‘Ensuring every citizen has access to suitable housing is a key policy goal of Government. “Have we succeeded in this regard? Clearly not. By contrast the National Housing Authority would publish a national housing plan- with localised components - within six months of establishment with the aim of achieving substantial and measurable progress towards this aim,” he said. The report which is entitled ‘Policy Options for Supporting the Provision of Housing at Affordable Prices’ was commissioned by the Society of Chartered Surveyors Ireland (SCSI). Mr Foley said the NHA would foster an integrated approach to our housing needs based on objective research and intelligence. “Prior to the economic collapse the market produced too many houses relative to demand and in the wrong locations. For example in 2006 we built over 93,000 housing units. By 2013 we had gone to the other extreme, building just 8,000 units a year, less than half of the projected demand. “There is widespread agreement on the policy moves required to address the housing issue. Several of them are hangovers from the Celtic Tiger era which are well past their sell by date. Others are measured responses to a much changed situation. “The National Housing Authority would coordinate the implementation of these and other policies in a timely manner and ensure the creation of a stable and sustainable property market over the long term. The net cost of the measures identified in the report would be much lower than the gross costs because of the increased volume of construction and the associated tax revenue flows” Mr Foley concluded. The President of the Society of Chartered Surveyors Ireland, Andrew Nugent said the current stressed housing situation would deteriorate further unless decisive action was taken on the supply side, particularly for lower priced units. “Between 2007 and 2014 building costs increased by over 2% but Dublin prices decreased by 30% or €144K per house. Nationally the decline was 23% or €73K. That is the climate house builders are now operating in.
Pictured at the launch of the SCSI report, which took place Chartered Accountants House, Pearse Street, were from left, Patricia Byron, Director General SCSI, Andrew Nugent, President SCSI and Tony Foley, from DCU Business School. For example we estimate the cost of an average newly built three bedroom house in north Dublin including profit margin to be €339K. But the actual price of new north Dublin three beds are about €280K,” he said. “Therefore it’s clear that building this house type is just not sustainable at present and while the prices might vary, this situation is being replicated all over the country. New housing at affordable price levels will not be built until it becomes economically viable for builders to do so and as a result the housing shortage will continue as will rising prices and rising rents.” Pending the establishment of the National Housing Authority the report recommends the Goverment should look to accelerate the rate of house construction. It says it could do this by speeding up the implementation of the new dwelling element of the Social Housing Strategy and by directly commissioning a volume of new houses from the private construction sector on land it already owns. These could then be sold to the owner/occupier or the Government could agreeing to underwrite sales in specific developments at the lower priced end of the market.
The SCSI is calling for: -
New National Housing Authority with ‘mandate to deliver homes’ Universal planning standards Reduced development levies Tax incentives for providers of rented accommodation VAT on new housing units to be reduced to 9% for 3 years Planning process for housing developments to be streamlined Government to commission a volume of new houses from the private construction sector C
October 2015 CONSTRUCTION 43
ireland report
Irish construction picking up at fast pace
International construction analysts, Timetic, has just published an indepth report on the Irish construction sector. Here we present some edited highlights.
I
reland’s construction industry suffered a dramatic decline during the financial crisis. In real terms, the Irish construction industry’s output contracted by 51.5% between 2008 and 2014, with output value declining from US$32.4 billion to US$15.7 billion. Weak business confidence and consumer demand, high unemployment, a large budget deficit, depressed economic conditions in the eurozone and public spending cuts affected demand for construction during the review period (2010–2014). The industry’s value is expected to pick up over the forecast period (2015–2019). Investment in social housing, commercial projects, infrastructure and renewable energy, as well as improvements in consumer and investor confidence and in regional and global economic conditions will support the growth. In real terms, the industry’s output value recorded a compound annual growth rate (CAGR) of -2.53% during the review period, but will bounce back with a CAGR of 5.77% over the forecast period. Consequently, the Irish construction industry is expected to rise from US$15.7 billion in 2014 to US$20.8 billion in 2019, measured at constant 2010 US dollar exchange rates. Accounting for 38.7% of the construction industry’s total value in 2014, residential construction was the largest market in the Irish construction industry during the review period. The market is expected to remain relatively sizeable over the forecast period,
with a 40.0% share of the industry’s total value in 2019. Over the forecast period, the market will be supported by the country’s growing population, urbanization, decreasing unemployment, and positive regional economic developments. Moreover, the government’s Social Housing Strategy 2020 will also support the market. Commercial construction was the second-largest market in the Irish construction industry during the review period, accounting for 22.1% of its total value in 2014. The market share is expected to increase marginally over the forecast period, to account for 22.2% of the industry’s total value in 2019. Over the forecast period, the market will be supported by growth in the retail and tourism sectors, investments in office buildings, and positive developments in regional and global economic conditions. The Irish infrastructure construction market accounted for 15.8% of the total construction output in 2014, followed by institutional construction with 9.3%, industrial construction with 7.5%, and energy and utilities construction with 6.6%.
Outlook
A number of factors, such as urbanization, rising disposable income and population growth, decreasing unemployment rate, positive developments in the domestic economic conditions
October 2015 CONSTRUCTION 45
ireland report
‘‘
Due to growing population and urbanization, the demand for schools, healthcare facilities and government buildings will also increase, leading the market to grow at a nominal forecastperiod CAGR of 4.84%, to value €1.5bn in 2019
’’
and improving consumer and investor confidence will support the country’s construction industry. Moreover, the government’s efforts to reduce the country’s housing deficit will also help the industry to grow over the next five years. Industry growth is expected to be supported by the government’s focus on social housing, commercial, transport and renewable energy infrastructure construction. Population growth and urbanization will continue to generate a demand for residential development. Under the Social Housing Strategy, 35,000 social housing units will be constructed across the country by 2020. Consequently, Ireland’s construction industry is expected to reach a nominal value of €16bn in 2019; up from €11.6bn in 2014.
Commercial construction
Commercial construction was the secondlargest market in the Irish construction industry during the review period, accounting for 22.1% of the industry’s total value in 2014. The market recorded a review-period CAGR of -3.78% in nominal terms, to value €2.5bn in 2014. This was due to stagnant levels of economic activity, which led to negative growth in the commercial construction market during the review period. The market is expected to record positive growth over the forecast period, driven by positive developments in domestic and regional economic conditions and investment in office and retail buildings. According to the Central Statistics
Office Ireland (CSO), the number of foreign tourist arrivals in the country grew by 8.9%, from seven million in 2013 to 7.6 million in 2014. Moreover, in the first half of 2015, tourist arrivals in the country grew by 11.7%, increasing from 3.5 million in January–June 2014 to 3.9 million in the same period in 2015. According to the CSO, the country’s retail sales volume index grew by 5.9 points – from 92.7 in 2013 to 98.6 in 2014 – while the retail sales value index grew by 3.6 points – from 87.7 to 91.3 over the same period. In January–June 2015, the average retail sales index grew by 8.5 points compared to January–June 2014, while the average retail sales value index grew by 5.0 points. This upward trend provides a clear sign of rising economic activity, which bodes well for future investment and new construction work in these markets. The expansion of the office buildings category will also support growth of the market over the forecast period. In February 2015, Apple Inc. announced its plan to develop a new data centre in Athenry, Co Galway, Ireland. The total investment for this project is anticipated to be €850m, and it is scheduled to be completed in 2017. Timetric expects the market output to record a forecast-period CAGR of 6.89% in nominal terms, to value EUR3.4 billion (US$4.1 billion) in 2019. Industrial construction The second-smallest market in the Irish construction industry during the review period was industrial construction, which accounted for 7.5% of the industry’s total output in 2014. The market recorded a
October 2015 CONSTRUCTION 47
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Ireland’s urban population as a percentage of the total increased from 59.1% in 2000 to 61.8% in 2010, and is expected to reach 64.8% by 2020. This will create fresh demand for residential construction over the forecast period
’’
48 CONSTRUCTION October 2015
review-period CAGR of -3.29% in nominal terms, to value €867.1m million in 2014. This can be attributed to the eurozone’s depressed economic environment, leading to a decline in demand for Irish exports and a consequent decline in industrial production. Expansion in the market over the forecast period will be driven by expanding industrial and manufacturing activities and recovery in the global economy. According to the CSO, the country’s seasonally adjusted average industrial production index grew by 24.2%, from 96.4 in 2013 to 119.7 in 2014. During the first four months of 2015, the seasonally adjusted industrial production index grew by 21.5%, from 114.2 in January–April 2014 to 138.8 in January–April 2015. The market is expected to register a forecast-period CAGR of 6.60% in nominal terms, to value €1.2bn in 2019.
Infrastructure construction
The third-largest market in the Irish construction industry during the review period was infrastructure construction, accounting for 15.8% of the industry’s total value in 2014. The market registered a review-period CAGR of -4.34% in nominal terms, and valued €1.8bn in 2014. The market is expected to record positive growth over the forecast period, supported by investment in road, rail and airport infrastructure projects. To meet the demand generated from the
urbanization process, the country’s transport infrastructure system requires a large capital investment. Consequently, to improve the country’s transport infrastructure and make it more effective for transport and logistics, the government is focusing more on infrastructure development. In its 2015 budget, the government increased its capital expenditure on infrastructure development by 6.3%, from €3.3bn in 2014 to €3.5bn in 2015. The country’s expanding population and economic recovery continue to generate demand for infrastructure development. The government’s efforts to improve transport infrastructure across Ireland will help the market to record a nominal CAGR of 5.86% over the forecast period, to value €2.4bn in 2019. This is the result of increased government investment and participation of the private sector through public private partnerships, which will support infrastructure construction activity over the forecast period. Energy and utilities construction Energy and utilities construction
ireland report
was the smallest market in the Irish construction industry during the review period. It accounted for a 6.6% share and valued €769m in 2014, following a review-period CAGR of -2.06% in nominal terms. Within the market, electricity and power was the largest category, with a share of 39.8% in 2014. This was followed by the sewage infrastructure, oil and gas, telecommunications and water infrastructure categories, with shares of 38.0%, 10.7%, 10.2% and 1.3%, respectively. The market is expected to record positive growth over the forecast period, supported by investment in the electricity and power, telecommunication and water infrastructure categories. The EU’s 20-20-20 strategy – which involves achieving a 20% saving in final energy consumption, a 20% improvement in energy efficiency and a 20% saving in carbon emissions – will increase the demand for renewable energy infrastructure, as Ireland is expected to supply 16% of its total energy consumption from renewable sources by 2020.
Under the Capital Investment Plan (CIP), Irish Water – a national water utility company – announced it is to invest €1.8bn (US$2.3 billion) between 2014 and 2016 to improve services. Under this, Irish Water will focus on improving the quality of drinking water, water availability, leakage, efficiencies and wastewater compliance. Efforts such as these will drive the growth of the water infrastructure category over the forecast period. Timetric expects the Irish energy and utilities construction market to register a nominal CAGR of 6.47% over the forecast period, to value €1.1bn in 2019. As a result of public and private sector investments, the electricity and power, water infrastructure and telecommunications categories are expected to expand over the forecast period.
Institutional construction
Institutional construction was the fourthlargest market in the Irish construction industry during the review period. It accounted for 9.3% of the industry’s total value in 2014. The market recorded a review-period CAGR of -3.69% in nominal terms, to value €1.2bn in 2014. This decline can be attributed to the economic slowdown and government efforts to reduce the budget deficit. Over the forecast period, market growth will be supported by investments in educational and healthcare building construction projects. The government aims to construct 150 new schools and expand 100 existing schools by 2016. Accordingly, in its 2015 budget, the government allocated €530m for capital expenditure. With an expected investment of €650m, the government is planning to construct a new National Children’s Hospital by 2019. According to the United Nations
Department of Economic and Social Affairs (UNDESA), the share of the population aged 60 or older is expected to increase from 16.0% in 2010 to 20.2% in 2020, and 24.2% by 2030. The median age of the population will therefore increase from 34.6 years in 2010 to 38.7 years by 2020, and 41.3 years by 2030. A larger elderly population will put pressure on existing resources and facilities, and create conditions for increase in investments in new and refurbished healthcare buildings. Consequently, the growing aging population is expected to drive expenditure and support the expansion of the healthcare buildings category over the forecast period. Due to growing population and urbanization, the demand for schools, healthcare facilities and government buildings will also increase, leading the market to grow at a nominal forecastperiod CAGR of 4.84%, to value €1.5bn in 2019.
Residential construction
Accounting for 38.7% of the construction industry’s total value in 2014, residential construction was the largest market in the Irish construction industry during the review period. The market recorded a review-period CAGR of -2.21% in nominal terms, to value €4.5bn in 2014. This decline can be attributed to economic slowdown and government efforts to reduce the budget deficit, which reduced investor confidence. Over the forecast period, the market will be supported by the country’s rising population, urbanization, a declining unemployment rate and positive developments in regional economic conditions. According to the UNDESA, the country’s population grew by 17.5%, from 3.8 million in 2000 to 4.5 million in 2010, and is expected to reach five million by 2020. Ireland’s urban population as a percentage of the total increased from 59.1% in 2000 to 61.8% in 2010, and is expected to reach 64.8% by 2020. This will create fresh demand for residential construction over the forecast period. Government efforts to maintain the balance between supply and demand for social housing are expected to support the growth of the market over the forecast period. Accordingly, in a bid to provide affordable housing, and meet demand from the country’s lower- and middle-income groups, the Irish government announced the ‘Social Housing Strategy 2020’ in 2014. The residential construction market is expected to be the industry’s fastestgrowing market over the forecast period, with an expected CAGR of 7.38% in nominal terms, to value €6.4bn in 2019. C
October 2015 CONSTRUCTION 49
recruitment
Recruitment – reports from the frontline The Irish construction sector is somewhere between finding its feet and breaking into a sprint depending on who you talk to and where in the country you visit. Those who work in construction recruitment now speak of a change in emphasis from expatriation to repatriation, impending personnel shortages and the challenge of finding quality staff, as Martin Foran found out.
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here’s no doubting the fact that there’s been a huge increase in the number of jobs available for Irish construction professionals over the past year to eighteen months. Among areas of activity to feature significantly are commercial and office space-related projects including fit-outs and refurbishments. Data centres, health care and education projects are also cited as major creators of employment by recruitment companies in the market. One person who has noticed a huge resurgence in employment numbers in this sector is James Lundy, business manager with Hays. “Figures for 2014 probably saw a 90% increase of jobs registered in the construction and property industry for Hays,” he says. Many others see a similar rise. All however are quick to point out that it is coming off of quite a low base which was a natural and direct result of the downturn. “Areas like architecture and civil and structural engineering suffered more than most,” says Lundy. “But we’ve seen – in the last
twelve months in particular – that all these areas have come back strongly. “And in the last six months, architecture and civil engineering have taken off ten-fold,” Lundy adds. “Architectural technicians and project architects are in high demand again.” James also mentions building services as well as general contracting and facilities management as other occupations that are experiencing a resurgence in terms of demand. BIM (Building Information Modelling) is also something about which there is a definite “buzz” right now. Contractors are definitely looking for BIM. That is the clear message here. “There is probably no one area that is not recruiting at the moment – which is massively positive,” sums up James Lundy. The biggest shortage in the market is probably at the junior to intermediate level, he adds. It is hardly surprising. Construction had been something of a dirty word in households for a time, most recruiters
October 2015 CONSTRUCTION 51
Barry Kelly, ICDS Recruitment Consultants acknowledge. Any young person applying for college courses might well have had parents pointing them in different directions. While steps are afoot to deal with this now, recruitment outside of the country or “repatriation” is a huge factor of the current construction employment market. There are good positions on offer here now for anyone tempted to come home, Lundy says. “The biggest switch is that we have gone form a temporary market to predominantly permanent roles. “I’d say eighty-five percent of jobs on offer are permanent roles now. Benefits are coming back in. There are good packages coming back.” “Salaries are rising slightly,” says Michael Byrne, owner of 3D Personnel, on this note. However, here Byrne flags another issue: “We have seen already in Northern Ireland when companies have priced work at lower rates and then when it comes to getting the staff they need they can’t get them for the prices they have quoted. “So rates need to be looked at in general.” Meanwhile, it’s not just professionals that are in demand of course points out Michael. He says that, on the trade or “blue collar” side it is very hard to get advanced scaffolders and crane drivers. Carpenters are in high demand too. “So many people gave up their tickets and the older generation moved into different fields,” he says. “There is a shortage.” Echoing James Lundy, Byrne says that on the professional side there is a shortage of Engineers and also, he says, QSs. Michael whose company has offices in Poland, Ireland and the UK, says that, in his view, it has really been in the last six
52 CONSTRUCTION October 2015
months that things have picked up. On an encouraging note Michael Byrne has noted a lot more smaller companies – like the “one man band”, subcontractorstypes – phoning in. “They don’t carry staff themselves,” says Michael. “They want a quick uplift.” “We see activity in a broad spectrum in Ireland,” says Michael Byrne. “However
‘‘
I think the growth in the industry is going to be determined by the staffing levels and the amount of candidates still available and in Ireland
’’
housing is lagging behind still.” The fact that there is less happening there means that it is harder to get staff with residential experience when projects do arise of course. At ICDS Recruitment Consultants, director Barry Kelly says for him the “hot spots” at the moment include schools, hospitals and data centres. “I think things are very positive in Ireland mainly inside the M50,” he says. This of course is echoed by others in the industry. “We have companies coming all the time to us and looking for staff. The rate of acceleration has increased in the last nine months.” As for repatriation: “We are bringing people back from the UK, Europe, Australia, Canada and the Middle East and we are always recruiting from the 32 counties for clients nationwide,” says Barry. Recruiting from abroad is often to do with contacts, keeping an eye on trends in the Irish diaspora and of course, having a presence in overseas locations as many of the recruitment companies like ICDS do. Quantity Surveyors, Estimators, Project and Contract Managers and people with BIM are in demand now from Barry’s experience. “You find people are retraining to get involved in BIM,” he adds. Meanwhile a big increase in design from a recruitment perspective has been noticed by manager of engineering and operations
recruitment
Cathal O Donnell from Brightwater
at Brightwater, Cathal O Donnell. Cathal notes that this is “really positive” as the actual build on the construction usually comes six to nine months after such an increase, he points out. “There are opportunities out there,” asserts Cathal. CAD people and Revit people are in demand as are Quantity Surveyors also, he notes. “For a long time I did a lot of expatriation to the Middle East and North Africa and now I’m probably doing more repatriation,” Cathal says. There are attractive jobs being offered, Cathal agrees. “There is competition back in the market. “We have seen that candidates will have a couple of options now as opposed to having to take the first that comes along. “Some of the consultancies are starting back with their graduate schemes which is great. We are in a much better place than twelve to eighteen months ago.” As activity starts to increase there is a possibility of seeing a shortfall from a staffing perspective however, cautions Cathal O Donnell. Of course opinions vary as to how far out we are from a major shortfall. Paraic Kelly, founder and managing director of constuctionjobs.ie, an online jobs board for construction engineering professionals, says that if there is a remarkable increase in activity then it will be obvious. However, “because we haven’t nationwide recovery and it’s dominated in
the Dublin area we can’t say ‘yes there is a shortage’, but where the shortage is coming into play is in the quality. “I’d say about fifty percent of our applications are for jobs in Dublin at the moment,” continues Kelly. “We always had an international element as well and you’d have about thirty percent of applications still going for jobs advertised abroad.” There is little surprise perhaps. Irish professionals have always served growing markets in the rest of the world, particularly in recent years – from reconstruction in Christchuch New Zealand to projects in Perth, Australia, the Middle East, North Africa, Canada and of course, London. It’s clearly not a simple matter of snapping our fingers and expecting the people to come back or for overseas competition to cease. As for those abroad, many have naturally settled into new lives. Recruiters point to the fact that often these are people with families who are that little more senior in their careers. That could threaten a particular shortage in terms of staff at that level of experience here at home, it is noted. And it is not just family and quality of life reasons that stop people from wanting to uproot themselves. In areas like the Middle East and London there are financial reasons such as attractive tax regimes and the high value
of Sterling versus the Euro. And yet, as Cathal O Donnell says: “I think the growth in the industry is going to be determined by the staffing levels and the amount of candidates still available and in Ireland.” With so many having left the industry, others having moved abroad and a new crop of graduates not really there just yet in significant numbers, it is indeed a challenge. Yet this particular challenge has been brought about by good news and positive developments. C
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I think things are very positive in Ireland mainly inside the M50
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Top professions in demand All recruiters who spoke with Construction agreed that there are quality jobs on offer now in Ireland with real incentives and benefits for successful candidates. Among the areas where demand is currently strong are included: • Architects and architectural technicians • BIM / revit skills • Engineers – structural and civil • Quantity surveyors • Project and contract managers
October 2015 CONSTRUCTION 53
news extra
Grant Thornton Construction Conference
The annual Grant Thornton Construction Conference takes place in Croke Park on Wednesday 4th November. “This event is exceptionally popular with all stakeholders in the industry for the insights it gives to all and the knowledge shared by the participants,’ says the company. This year’s conference is titled “Opportunity in Complexity”. The topics
range from the financing of projects to the planning issues that are negatively impacting on the delivery of projects. “We hope that attendees will gain relevant and practical information from attending the conference as well as having an opportunity to network with their colleagues in the industry.” It has been well documented that the majority of the projects purchased over the
past few years have been bought by funds that do not have significant operations in Ireland. At what point do they decide to move to their next destination and resell assets to local purchasers? Has this process commenced already? If so, how do the local purchaser’s best align themselves so that they are able to capitalise on the opportunities as they arise? We will take an in depth look at what is currently happening in the market and hear from some of the most active funds operating in Ireland on their views on future strategy and how it specifically impacts on local businesses in the sector. While the world of finance dominates the newspaper inches those deep-rooted in the industry will appreciate that the whole area of planning laws, positive and negative, drive the majority of the work that is currently underway and what is likely to happen over the next 12 to 24 months across the country. Again, as with the area of finance, experts will give their views on where this minefield of an area is going and what solutions, if any, can those attending the conference take to use for their own benefit over the coming period. “We look forward to welcoming you to the conference and to helping you capture some of the opportunities that the various complexities afford us all.”
Solas announce Canadian crane deal Irish crane operators qualifications are to be recognised in Canada and vice versa as Solas and the British Columbian Crane Safety Association have announced the recent signing of a Memorandum of Understanding between the two bodies. The new agreement allows crane operator qualifications for mobile crane operator and tower crane operator to be seen as equivalent to Canada’s professional crane operator qualifications. The agreement will enhance the international mobility of crane operators between the two countries. Irish workers gain qualifications in this field by undertaking training programmes as part of the Construction Skills Certification Scheme (CSCS) which is managed by Solas. A mutual recognition agreement for crane operators with the UK’s Construction Plant Competency Scheme (CPCS), which is the leading trade association for this sector in the UK is already in place.
54 CONSTRUCTION October 2015
Commenting at the signing of the agreement, Mary-Liz Trant, Executive Director at Solas, said: “We are very pleased that this agreement has been finalised and our thanks to everyone involved. Canada is a popular destination for Irish emigrants and I believe this agreement will assist many of them and their Canadian Employers. We look forward to continuing our working relationship with the British Columbian Crane Safety Association.” The Chair of the CHRSC, Tim Bennett, stated: “This agreement is the result of an industry vision that was initiated a year and a half ago as part of the ESDC/CHRSC MultiJurisdictional Crane Operator Regulation Certification Comparison and Reciprocity Initiative, which was funded through the Government of Canada’s Foreign Credential Recognition Program. The project launched yesterday, several months ahead of schedule. Our thanks go to the many crane industry
volunteers in Canada who worked on this initiative, and also to our colleagues in Ireland for their reciprocal contributions and effort, leading to this agreement.” The Canadian Hoisting and Rigging Safety Council (CHRSC) is dedicated to the harmonisation of hoisting and rigging standards across Canada. The Council acts as a place to connect, as industry, to set goals and strategy working toward a common outcome. The BC Association for Crane Safety (BCACS) provides leadership for health and safety development within the crane hoisting industry. BCACS works closely with industry, labour and government to implement new standards of assessment and certification that make for a safer workplace. BCACS administers a comprehensive, inclusive credentialing regime to support the goal of accident free crane operations throughout British Columbia. C
CIF training and education programmes for October 2015
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End Date
Course times
CIF IOSH Managing Safety in Construction MSIC 1st October 29th October CIF Construction House, 2552 Thursday Thursday Canal Road, Dublin 6 CIF IOSH Managing Safety in Construction MSIC 2nd October 30th October Castlebar Regional Training Centre 2606 Friday Friday Castlerbar CIF QQI Building Control Course -Part B & Part J - BCC 8th October 18th June Fire Safety [1] CSE 2 2505 Thursday Thursday CIF Construction House, Canal Road, Dublin 6 CIF QQI Building Control Course -Part B & Part J - BCC 9th October 19th June Fire Safety [2] CSE 2 2505 Friday Friday CIF Construction House, Canal Road, Dublin 6 IOSH Project Supervisor Design Process PSDP 15th October 16th October CIF Offices, 2553 Thursday Friday Canal Road, Dublin 6 CIF IOSH Managing Safety in Construction MSIC 13th October 10th November Radisson Blu Hotel 2554 Tuesday Tuesday Limerick
09.30am – 16.30pm
Introduction to Site Waste Management EM 14th October 14th October and Environmental Awareness 2556 Wednesday Wednesday CIF Construction House, CIF Offices, Canal Road, Dublin 6 Advanced Site Management ASMP 14th October 11th November Radisson Hotel 2624 Wednesday Wednesday Athlone Project Supervisor Construction Stage PSCS 15th October 29th October CIF Construction House, 2557 Thursday Thursday Canal Road, Dublin 6 CIF Core Safety Management Programme Renewal/CPD CSMP 21st October 21st October Radisson Hotel 2558 Wednesday Wednesday Athlone IOSH Project Supervisor Design Process PSDP 20th October 21st October Clare Co. Co. 2618 CIF IOSH Managing Safety in Construction MSIC 21st October 18th November Radisson Blu Hotel 2625 Wednesday Wednesday Galway CIF QQI Building Control Course-Part F & Part L - BCC 22nd October 2nd July Ventilation & Conservation [1] CSE 2 2505 Thursday Thursday CIF Construction House, Canal Road, Dublin 6 CIF QQI Building Control Course -Part F & Part L - BCC 23rd October 3rd July Ventilation & Conservation [2] CSE 2 2505 Friday Friday CIF Construction House, Canal Road, Dublin 6 CIF Core Safety Management Programme Renewal/CPD CSMP 23rd October 23rd October CIF Construction House, 2559 Friday Friday Little Island, Cork. CIF Core Safety Management Programme Renewal/CPD CSMP 28th October 28th October Radisson Hotel 2626 Wednesday Wednesday Galway
09.00am - 17.00pm
09.30am – 16.30pm
08.30am-17.00pm
08.30am-17.00pm
08.30am – 16.30pm
09.30am – 16.30pm
09.30am – 16.30pm
08.30am - 17.00pm
08.30am 13.00pm
08.30am – 16.30pm 09.30am – 16.30pm
08.30am-17.00pm
08.30am-17.00pm
08.30am - 13.00pm
08.30am - 13.00pm
October 2015 CONSTRUCTION 55
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INDUSTRY NEWS Value of construction projects up over €800m in first half of 2015
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he value of construction projects commenced saw a significant increase in the first half of 2015, rising by €802 million to €2.754 billion when compared to the same period in 2014 according to the Building Information Index. This represents an increase of +41% in the value of actual construction activity for the first six months of 2015 when compared to the first half of 2014. Danny O’Shea, Managing Director of Building Information Ireland, said “The Building Information Index shows that the value of construction projects increased by €802 million to €2.754 billion in the first six months of 2015 from €1.952 billion for the same period in
2014. “When these figures for the value of project commencements are broken down for the different regions, the Building Information Index shows that the recovery in the construction sector is being felt across the whole of Ireland, with Munster recording the largest increase with gains of +116%, while Dublin (+34%), Leinster (+27%) and Connaught/Ulster (+8%) also performed strongly. “When we analysis project commencements in the first half of 2015 in each the seven sectors that the Building Information Index compiles data for, commercial and retail was the strongest performing sector at €624 million which represented an increase of +141% when
compared to the same period in 2014. The industrial sector also recorded strong gains at +58%, while the residential sector recorded growth of +44% year on year with the value of residential construction projects started in the first 6 months of 2015 valued at €1.43 billion. Education (-37%), agriculture (-12%) and medical (-6%) all recorded a fall in the value of the construction projects for the first half of 2015 when compared to the same period in 2014,” he added.
Applications up +27%
There was further good news for applications, which measures the value of construction projects that have applied for planning permission, as it rose by +27% to €7.011 billion in the first six months of 2015 from €5.5 billion for the same period in 2014. “The strong growth recorded in the first six months of 2015 in the value of applications as well as the value of project commencements is further evidence that the construction industry in Ireland is continuing to recover,” said Danny O’Shea. Critically, the Building Information Index reveals that the source of funding which is driving this recovery is coming from the private sector. Funding from the private sector for Applications was €6.428 billion in the first six months of 2015, which represented an increase of 30% when compared to the first half of 2014. By comparison, in the first six months of 2015, public sector funding for Applications only increased by +2%, rising to €584 million from €573 million in the first half of 2014.
October 2015 CONSTRUCTION 57
RoanKabin unveils innovative accommodation solution RoanKabin, an Irish-based manufacturer and supplier of modular building solutions, has unveiled presents its innovative housing unit at the Modular Housing Demonstration Project at a site on the East Wall Road. The exhibition is being run by the four Dublin local authorities to advance the accommodation options for families who are currently placed in emergency accommodation whilst awaiting social housing. RoanKabin has constructed a 75 sqm two bedroom accommodation pod, which could accommodate a family of five. The unit contains a fully equipped kitchen including a cooker and a washing machine, a bathroom with a shower and a comfortable living room space. These units can be built with one, two or three bedrooms to accommodate families of six. RoanKabin took a modular approach to the development of its exhibition house, meaning it was built in sections at the RoanKabin factory in Kildare and then assembled on-site in a matter of days. This method of off-site construction is more time effective than a typical build. Roger Hastie, Managing Director UK and Ireland, RoanKabin said: “RoanKabin believes strongly that modular homes could play a critical role in addressing the significant homeless crisis. We are delighted to participate in this exhibition to showcase our modular solution and to have an opportunity to highlight the key benefits of this approach including high standards of workmanship and materials, design options and, of course, the fast speed at which modular builds can be constructed.
“Modular houses are suitable for both temporary and long term accommodation, with a 60 year warranty, and can even be repurposed by Dublin City Council in the future, making it a good investment”. Although the exhibition is highlighting modular built homes as a temporary solution to the homelessness crisis, this form of off-site construction is also used to construct permanent buildings such as hospitals and schools. RoanKabin has completed projects at St. James Hospital, Cork University Hospital and a range of primary and secondary schools around Ireland. Modular buildings constructed by RoanKabin today are of the highest technical specifications, well insulated and are as comfortable as traditional builds. Modular builds can offer a much greater degree of design freedom ensuring housing would be visually appealing and enjoyable for residents. The building RoanKabin has provided complies with the latest building regulations. The planning guidance states residential developments comprising 10 or more units will also require 20% of total predicted carbon emissions to be off-set through on site renewable energy sources which RoanKabin can support. This however could vary between planning authorities.
Accountants take to their Saddles for Charity As part of Baker Tilly Ryan Glennon’s charity fundraising campaign 2015 the firm has combined fundraising with fitness and are taking to their bikes for the 3rd year in a row. On the 19th September the team took to their bikes to complete the Wexford Welcome Home Cycle for the Peter McVerry Trust. George Maloney, Restructuring and Recovery Partner, Baker Tilly Ryan Glennon started the now annual event and said: “We are excited to be associated with this very worthy event again this year.” Commencing at UCD the 141k journey took the cyclists through many towns and villages ending just outside Wexford town. The aim of the cycle is to raise much needed funds for a very worthy cause. This well-known charity supports young homeless people to break the cycle of homelessness and move towards independent living through the provision of a continuum of care services. Baker Tilly Ryan Glennon have set up a donation page option online which is http://www.mycharity.ie/event/btrg_welcome_home_ cycle_2015/
58 CONSTRUCTION October 2015
Staff from Baker Tilly, including George Maloney (centre), at the launch of the company’s charity campaign
industry news
Kilkenny engineering company shortlisted for ‘Innovation of the Year’
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ilkenny company Prochem Engineering Ltd. has been shortlisted for one of the top honours in the pharmaceutical industry – the Innovation of the Year accolade – that will be announced at next month’s prestigious Pharma Industry Awards 2015. Prochem has been shortlisted for Innovation of the Year as a result of its inventive and determined approach to the design and delivery of The Equilibration Warehouse, a close control, high temperature and relative humidity storage facility on behalf of its client, Teva Pharmaceuticals Ireland Ltd. The Equilibration Warehouse project, conceived and implemented by Prochem, saw the successful application of a new and alternative ventilation design to that of the existing equilibration facility. By reducing the energy consumption requirements per pallet space by as much as 80 %, the end result has allowed Teva to significantly scale-up its warehousing operations without increasing energy costs. Prochem brought a 15-strong team to the project, all of whom have significant pharmaceutical engineering experience. It was led by Kevin Lynch, Prochem Director of Building Services Engineering with significant support from Mark Campion as Senior Building Services Engineer. “We are very proud of The Equilibration Warehouse project we delivered for our client Teva,” said Donal Higgins, Managing Director of Prochem. “We apply best practice to all client work but it’s very rewarding to have this acknowledged publicly by an awards initiative as prestigious as the Irish Pharmas. It is also gratifying that, of all the projects and companies nominated across all award categories, Prochem is the only engineering consultancy company considered, which is a testament to the expertise of our team in Kilkenny and the value placed on them by our industry.” Prochem Engineering was established in 1995 to service the process engineering needs of the southeast and is recognised as one of the leading multi-disciplinary engineering consultancies in Ireland. The company offers chemical, process, building services, mechanical, electrical and automation expertise and services to the life sciences, industrial, ICT and food sectors.
Pictured is Managing Director for Prochem Engineering Donal Higgins (right) with company director Kevin Lynch (center), who led The Equilibration Warehouse Warehouse project with significant support from Mark Campion, Senior Building Services Engineer.
bauma 2016 Munich The largest trade fair on earth is back...bauma 2013 broke records. In total there were 3,420 exhibitors from 57 countries and a staggering 530,000 visitors from over 200 countries - the highest number of visitors ever. bauma continues to be an innovative platform for all branches of the industry, bringing together people from all over the world to do business and see the latest industry developments. If you are in the construction industry, you simply have to be here. bauma is without a doubt a driving force behind innovations and success for the global construction machinery industry. Every three years bauma attracts visitors from more than 200 countries around the world. Over 79 percent of trade visitors participate in decision-making processes that initiate and result in the conclusion of concrete business transactions. Take advantage of this opportunity to initiate new business and tap into international markets. International Trade Fair for Construction Machinery, Building Material Machines, Mining Machines, Construction Vehicles and Construction Equipment 11 – 17 April 2016, Munich.
October 2015 CONSTRUCTION 59
Lobbying Act 2015 and the CIF information from a public official. • Published submissions: Communications requested by a public service body and published by it. • Oireachtas committees: Communications which are made in proceedings of a committee of either House of the Oireachtas. • Policy working groups: Communications between members of a relevant body appointed by a Minister, or by a public service body, for the purpose of reviewing, assessing or analysing any issue of public policy with a view to reporting to the Minister or public service body on it.
Designated Public Officials
Minister’s & Ministers of State TDs & Senators Irish MEPs Special Advisers Secretary Generals & Assistant Secretaries in the Civil Service Chief Executive Officers & Directors of Services in Local Authorities This list may be extended at any time by Ministerial Order.
Important Dates for members
The new Lobbying Act was introduced on 1st May 2015, and is designed to provide information to the public in a transparent fashion about: • Who is lobbying? • What are the issues involved? • What is the intended result of the lobbying? • Who is being lobbied? This will be done via a publicly accessible website: www.lobbying.ie where lobbyists are obliged to register such information about their lobbying activities. The Act will be regulated by the Standards in Public Office Commission & a Code of Conduct.
What is “Relevant Communication”? CIF, as well as any of our members must record all activities where any staff member communicates, either directly or indirectly, with a ‘Designated Public
60 CONSTRUCTION October 2015
Official’ on a ‘relevant matter’ which is defined as: • Initiation, development or modification of any public policy or programme • Amendment of any law (including secondary legislation such as statutory instruments and bye-laws) • Award of financial support involving public funds • Any one individual communicating about their own development and zoning of land • Pre-litigation correspondence Irrelevant matters (activities that do not need to be disclosed): • Technical matters. • Matters relating only to the implementation of a policy, programme, enactment or award. • Factual information: Communications requesting factual information or providing factual information in response to a request for the
• 1st September 2015: The Act will come into full effect. All lobbying activities from this day forward must be recorded. • 21st of January 2016: Deadline for the first set of returns, which will cover the period • There will be a total of three returns per calendar year. The Act is due to be reviewed in year one, and every three years thereafter. The CIF Communications department will be coordinating the collection of lobbying activities by CIF staff members on a monthly basis from the 1st of September 2015 onwards. “I strongly emphasise that members are responsible for their own registration and compilation of lobbying activities, except in circumstances where a CIF employee has requested that the lobbying takes place,” said CIF Director General Tom Parlon. “Members who engage in lobbying activities and who have not already registered at www.lobbying.ie must do so as a matter of urgency.” If you have any queries in relation to the Act, or its implications, please contact Rosalind Travers in our communications Department: rtravers@cif.ie
industry news
Groundforce provides excavation support for Galway road improvement
Groundforce has designed and supplied an excavation support solution for a major road improvement scheme in Galway. The equipment was supplied to building and civil engineering contractor L&M Keating for a project to lower the level of the Lough Atalia Road – one of the busiest roads in Galway – as it passes beneath the main Irish Rail tracks. The Lough Atalia Bridge is a low, 19th century cast iron arch structure, and until now, height restrictions have meant that any vehicles over 3.68m high had to move towards the centre of the road to pass under it. However, it is not unknown for vehicles to strike or get stuck under the bridge. The City Council’s solution was to lower the road by 1.3m, and L&M Keating undertook the work during an eight week closure of the road during April and May 2015. “As a result of the road level being dropped, storm water now has to be pumped away, so the contract included construction of a storm water holding tank and pumping station,” said an L&M Keating Project Manager. “A 45m long, 3.5m wide, 2.5m high tank was constructed using precast concrete culvert units, and sits below the road on the south side of the bridge, with the invert at a depth of 6m below road level” he added. Groundforce designed and supplied a shoring system to retain the ground while
the culvert sections were installed. As programme was of key importance, it was decided to create a watertight cofferdam around the entire area, consisting of sheets and frames to give large clearances between the cross struts and allow the culverts to be lowered into place without obstruction. This system was made up of a combination of 6m and 7m interlocking
GFI trench sheets installed using a MS4 piling hammer, supported by a Mega Brace waling beam and HSK80 cross struts. Groundforce supplied the excavation support system for a period of 3 weeks while L&M Keating installed 19 precast concrete culvert units, each weighing between 12t and 14t, as well as a pumping chamber to house the pumps required to divert storm water over a length of 730m. “This was complex excavation due to its size, tidal water conditions and varying ground conditions,” said Groundforce technical representative, Joe Lenihan. “The support system was originally designed using large trench box systems but due to the presence of water and the size of culvert sections, it was decided that the cofferdam system would be preferable to aid the installation sequence” he added. Groundforce has also supplied equipment for other elements of the project, including standard and lightweight trench box systems, Vertishore - lightweight shoring for between services - and pressure testing equipment for the new 400mm water main, over the course of the eightweek project.
October 2015 CONSTRUCTION 61
Wellhöfer 4D Airtight Preinsulated Attic Hatch
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irtightness is an essential part of creating a healthy, comfortable, energy-efficient living environment, whether in new builds or refurbishment projects. Excessive air leakage is recognised as a major cause of energy loss and increased CO2 emissions. High levels of air leakage also significantly increases the potential for condensation to occur within building elements, which may lead to insulation and structural degradation and mould growth. This is especially in cold attic spaces. This occurs as warm air leaks into the cold attic space leading to condensation. As regulations require higher levels of insulation in attics, this in turn leads to a cooler temperature within the attic space.Following from this, there is increased risk that any air leakage which passes from the heated space into a cold attic can condense rapidly. The attic hatch is the single largest penetration in the ceiling of a building. The airtightness and thermal resistance of an attic hatch has a direct & significant effect on the overall thermal performance of a ceiling. The quality of the airtightness of not only the hatch door, but also the integrity and means by which the hatch frame is sealed to structural joists or noggins also has a significant impact on the airtightness of the ceiling. It is essential not only to apply a hatch door which is certified airtight and adequately insulated, but the installation of the complete unit must be fully airtight to realise optimum performance. A poor installation of an airtight attic hatch means that while the door is airtight, the gap between the frame and the surrounding joists
may lead to high levels of heat loss, air leakage and significantly increased risk of condensation within the attic space. Wellhöfer have been manufacturing high performance attic hatches and ladders in Würzburg, Germany, since 1951. The Wellhöfer 4D attic hatch not only features a certified airtight and pre insulated attic door, but also features an independent airtightness sealing system which seals the hatch frame to the surrounding timber joists, noggins or the adjacent airtightness and vapour control layer. The hatch door is not only third party certified airtight door, but the additional hatch frame sealing system has also received third party airtightness certification. The system has been used in many buildings achieving low energy and even Passivhaus levels of performance for airtightness. The airtight seal of the hatch door is maintained by means of a pre-stressed spring which ensures the door remains airtight, even when a blower door test is carried out. This spring is full adjustable to the homeowner’s requirements. The airtightness of Wellhöfer 4D is 5 times better than that required by DIN 4108-2 and is certified to EN 1026:200-09. The complete hatch also features a low U value of 0.78W/m2k certified to EN ISO 12567 – 1: 2001/02. It should be noted that this U value is for the complete system rather than a single optimum position in the centre of the door. When specifying a truly airtight attic hatch one should ensure not only that the door is airtight, but also, the means by which the attic hatch’s frame is sealed to the adjoining vapour control layer or timber noggin. One may install an attic hatch which has an airtight door, yet, the leakage area between the frame and the surrounding noggin can lead to a hole the equivalent in size to an A4 sheet and an additional 70-100 litres of heating oil required per year! One cannot underestimate the importance of not only installing an airtight and adequately insulated attic hatch, but also to ensure the frame is also installed airtightly. The Wellhöfer 4D hatch and ladder are ideal for both new build and retrofit projects. Wellhöfer 4D airtight attic hatch is supplied in a standard 1200x 600mm dimensions. A smaller certified airtight pre insulated access hatch is also available (600 x 600mm). Alternative dimensions are also available on request. For more information concerning the Wellhöfer 4D attic hatch and ladder, please do not hesitate to contact Ecological Building Systems at: info@ecologicalbuildingsystems.com or call 046 9432104.
Private pension crucial as life expectancy increases A recent CIF Breakfast Briefing heard from Declan Lawlor, who works with the Retirement Planning Council of Ireland, that planning for your retirement is more crucial than ever. Declan said that in 1970 the average man could expect to live for 12 years after retirement, with women living for three years longer. Fastforward to the present day and the average worker will live for 20 years after retirement. In fact, the first person to live to 150 years old has already been born, he said. “The probability for a man living past 90 is 47%,” he added. “While for a women it’s 55%.” The State pension age qualification soon will be 68 while for younger people it will probably be over 70 by the time of retirement. All of these statistics point to the need for an adequate private pension. Susan O’Mara from Milestone Advisory went through the different available options, reminding those attending to: “Get advice”.
62 CONSTRUCTION October 2015
(L-R) Declan Lawlor, Retirement Planning Council of Ireland, Susan O’Mara, Milestone Advisory and Paula Thornton, Business Development Manager, CPAS
for your diary
Tuesday 13th October
Executive Body meeting
Midland Branch meeting
Tuesday 3rd November
Thursday 19th November
Construction House, Dublin, 11am Contact: Gillian Heffernan 01 406 6016
Tullamore Court Hotel, Tullamore, 8pm Contact: Justin Molloy 091 502 680
TF Royal Hotel, Castlebar, 8pm Contact: Justin Molloy 091 502 680
Monday 2nd November
Wednesday 11th November
Tuesday 24th November
Ardilaun House Hotel, Galway, 6pm Contact: Justin Molloy 091 502 680
Mount Errigal Hotel, Letterkenny, 8pm Contact: Justin Molloy 091 502 680
Monday 2nd November
Wednesday 18th November
Construction House, Little Island, 4pm Contact: Brid Cody 021 435 410
Brandon House Hotel, New Ross, 7pm Contact: Brid Cody 021 435 410
Galway Branch meeting
Cork Branch Executive meeting
Donegal Branch meeting
South East Branch meeting
North West Branch meeting
Executive Body meeting (AGM 12.45pm) Construction House, Dublin, 11am Contact: Gillian Heffernan 01 406 6016 Monday 7th December
Cork Branch Executive meeting Venue to be decided, 5pm Contact: Brid Cody 021 435 410
October 2015 CONSTRUCTION 63
Last Fix Some mind boggling numbers...
According to a new report by Timetric’s Construction Intelligence Center (CIC), 14 of the major economies in the Middle East and Africa are currently investing, or planning to invest, over US$1.82 trillion in commercial and institutional projects. The UAE leads with investment of US$687 billion, followed by Saudi Arabia with US$436 billion and Kuwait with US$158 billion. The mixed use sector is by far the highest value sector at US$1.47 trillion, followed by leisure and hospitality at US$134.6 billion. Institutional and religious projects, including government buildings and places of worship which predominantly relates to mosques in the region, are valued at US$51.5 billion. Saudi Arabia dominates this sector with 84% of the value, driven by huge numbers of pilgrims to its major religious sites, which also provides investment in the leisure and hospitality market for hotels.
Three in five construction workers don’t have an employment contract… More than 60% of UK construction workers polled by constructaquote.com admitted that they didn’t have an employment contract and a further 20% said that they weren’t sure whether they did have a contract or not. The study, which polled more than 1000* UK adults who work in the construction industry, also questioned the respondents about their annual leave entitlement and sick leave. Four out of five (82%) revealed that they did not receive any sick pay from their employer and 86% don’t get any paid annual leave. When asked if they get paid if the weather stopped them from working, only 12% said that they did, with a further 4% stating that it would depend on the circumstances. When asked if they considered themselves to be on a zero-hour contract, only 16% admitted that they did, with more than three quarters (76%) stating that they don’t have any kind of contract and that they just turn up for work. Furthermore, when asked if they would prefer to be on a zero-hours contract or have an employment contract, the majority (68%) would opt for an employment contract.
Activity, jobs & solutions…Our image shows Michael Stone, President, CIF with Tom Parlon, CIF Director General, and Dudley Solan, Partner and Head of Commercial Litigation and Dispute Resolution Group, Maples and Calder at the photocall to announce the offical launch of the CIF Annual Conference 2015.
Photo of the month
Pointing the way…..
Taoiseach Enda Kenny TD at the official launch of a $300 million telecommunicatioms cable that will travel from Mayo to America and is owned and operated by Irish company Aqua Comms.
64 CONSTRUCTION October 2015
fact of the month the average construction worker lost out on €1500 this summer due to childcare
Martin McVicar MD Combilift with Minister Heather Humphreys, Tom Kelly from Enterprise Ireland, Eugene Cummins, Monaghan County Council and Robert Moffett, Combilift at the official ‘sod turning’ ceremony at the site of Combilift’s new facility
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11/09/2013 18:07