Friday, August 28, 2009

They think its all is now!

Just when Germany thinks they are coming out or have come out of recession this is what they do. Well to be more accurate they did it in June:

"At the past weekend collective bargaining between employers (ZDB) and unions (IG Bau) in the German construction industry came to an end which was reached through conciliation. According to the agreement reached, wages and salaries of the about 700,000 employees in the German construction industry are to be raised by 2.3% as of June 1st 2009 and by another 2.3% from April 1st in 2010. For May 2009 employees will receive a single additional payment of 60 Euros. The new collective wage agreement will be valid for 24 months. "

This is summed up as follows (I'm led to believe?):
Minimum wage goes up (this must be the construction industry minimum wage) in 10c increments in the period 9/2009 to 9/2010 getting to €11 / hr. Note that this is for the West of the country only, they are still on lower incomes in the east and even have lower wage agreements, same worker in the eastern part gets increased from €9 to €9.25 in 9/2009 rising to a max level of €9.75 in 9/2010.

Now in 2008 Reuters reported that a deal was struck where the 700,000 workers had agreed on €10.70 / hr as the minimum from €10.40. The workers / unions must have got this deal last year and went dipping into the pot for more? Well it appears if they have this has worked.

Now lets compare this to our situation. Tom Parlon was heckled and abused by workers last February when he tried to talk to the unions about a a pay freeze, thus quelling the pending 3.5% increase in the national wage agreement.
His argument that this pay freeze or even a pay cut would create 55,000 more jobs in our industry. The figure of 55,000 may be slightly exaggerated, but he is certainly right about some increase in employment.

The current minimum wage for non-skilled workers in Ireland is a staggering €14.88 per hour and goes up to €18.04, so a construction operative Grade 'A' is at €18.04 / hour, basic, excludes overtime. Add in country money to this and work out employer on-costs and the cost for a labourer per hour would be over €30 or circa €1650 / week.

Is it any wonder the German lads sought an increase.

Multiplex v Mott MacDonald - Wembley Case - The Legal Eagles look like they will be the Biggest Winners!

The latest reports on this case are that Multiplex have already spent over £20 million on legal fee's and this figure is expected to more than double and possibly treble (depending on the timescale of the trial) before the case is finished.

The initial time frame for the trial was two months but could drag out for up to eight.

Motts are reported to have forked out over £6 million and they expect this to more than treble, again depending on the timescale of the trial.

It was stated by many observers that this case would never reach the court room. As the applicable rule of court in common law cases under normal circumstances is 'costs following the event' and the current legal expendidture and expected further spiralling costs it appears that this case may reach the courtroom after all?

Monday, August 24, 2009

And the Bridge comes tumbling down...

So Iarnrod Eireann / Irish Rail witness a bridge getting washed up over the weekend and luckily there was no fatal accident as a result.

The prolongated tender procurement process for public sector construction contracts currently involves contractors having to go through the riggers of answering health and safety questions, quality control procedures, method statements and other such trivial red tape considerations in order to qualify to get on tender lists. Even after successfully getting on the tender list and when a contract commences more red tape is required.
One such client is Irish Rail.

It's a pity clients such as Irish Rail cannot get their own house in order in the first place and practice what they preach by way of having some Q/A and safety system in place. After this near disaster it is evident that something somewhere in their process and inspection procedures is flawed.
It is said that this Malahide Estuary bridge dates back to 1844. This in fact pre-dates the brilliant and beautiful Forth Rail bridge in Scotland. One cannot presume to draw a comparison between our Malahide Estuary bridge and the Forth Bridge however the date and timeline is an interesting point to remark on as the Forth Rail bridge underwent a safety inspection in 1996 and the result was a full refurbishment contract.
Why didn't our people in Irish Rail derive some similar inspection for a bridge so old? There are also extensive ground movement and monitoring devices in the market these days to enable old structures such as this bridge to be flagged and watched more carefully and any ground movement can be predicted. Its incredible that in 2009 that something like this would happen in a country that now regards itself as modernized.

Anyhow it will be a typical Irish reaction where no uproar will ensue and reports and the like that were supposed to be carried out will all get forgotten about and nobody will get the blame or lose there jobs over this. One would imagine one hell of a different reaction from the public had a train crash ensued as a result.

If a contractor designed and constructed a failed bridge they would certainly have to pay the price and the incident certainly wouldn't be forgotten, or would it?

Tuesday, August 18, 2009


The latest news in the ZOE saga or 'ZOE-GATE' is that Lawyers for Mr Carroll on the 14th August 2009 secured the last-minute reprieve for seven companies in his Zoe group which owes €1.2 billion to its bankers.

Mr Justice Eamon de Valera permitted the presentation of a petition to appoint an examiner next Thursday (20th August is D-DAY or Z-DAY) which hopefully will give the companies breathing space to organise their long-term survival.

This is an unusual circumstance to occur after the courts already made their decisions?

Perhaps there is political clout going on behind the scenes in order to 'save' this group? Personally as bad as things are and for the sake of the industry one would hope that the group gets their shot at examinership.

I also have a feeling that the other banks will step in and 'front-up' for ACC.
For an insiders viewpoint on this saga go to this discussion borad (if you have time to read all the lenghty posts!)

Thursday, August 6, 2009

Quotes from the Irish Property Bubble

A fellow blogger has an excellent blog on the web, which perhaps backs up my last blog on Mr. Parlon's lack of Factual Figures etc (or maybe Tom was to *'homed-in' during the boom years on the builders (domestic builders / developers) that he is now only learning about the infrastructure sector of the construction industry;

link as follows:

*apoligies for the pun

Tom Parlon says that State Projects 'the only game in town'

This blogger notes in the current issue of the highly informative Construction and Property News that Tom Parlon of the Construction Industry Federation (CIF) is in agreement with my last blog.

He states that the National Roads Authority (NRA) began constructing 216km of roadway in 2007 and 169km in 2008. The scary fact is that for 2009 this figure will have plummeted to 5.5km or 5,500 meters that's a massive 97% aggregate drop.

Its interesting that Mr.Parlon cannot or doesn't issue some concise factual figures and do a comparison vis a vis the money pushed into banks similar to my calculations. The reason behind this is perhaps that the money to shore up the banks is due to the outstanding debts owed to them by the very developers that Mr.Parlon and the CIF have been backing.

Having attended a recent excellent lecture given by Hank Fogarty (former president of the CIF) where Mr.Fogarty stated and suggested that the Country needs a Minister for Construction and where I would be in agreement with this to a certain degree. One would, however, be inclined to perhaps have a Minister for Infrastructure rather that Minister for Construction.

Some TD appointed and a whole department in charge of Public Procurement and the needs and requirements of the Public Sector Engineering and Building Contractors to ensure that there is enough supply of work to at the very least keep established companies afloat.