Brexit 'shambles' has forced us to turn down contract: Co Down construction firm
The head of a Co Down construction services firm has said he has turned down a three-year contract extension with a client due to Brexit and the latest proposals from Boris Johnson.
As businesspeople digested the Prime Minister's border blueprint, some welcomed the plans as a "starting point" and said they backed the provision for a single market for goods on the island of Ireland.
But Connaire McGreevy, managing director of CTS Projects in Warrenpoint, said construction-related businesses could not plan far ahead as Brexit uncertainty had pushed up the cost of materials and labour.
However, Liam Duffy, the owner of The Classic Mineral Water Company in Lurgan, said: "I welcome the fact that the Prime Minister wants Northern Ireland to remain aligned with the EU's single market rules for trade in animal, food and manufactured goods.
"I am interested in what the scope of 'manufactured' goods is. This seems very broad and I welcome that."
Brian Irwin (below), chairman of the Northern Ireland Food and Drink Association (NIFDA) and chairman of Irwin's Bakery in Craigavon, said the proposals were "a step in the right direction".
"It is welcome that the Government has tabled these proposals. In particular, we once again welcome the confirmation of unfettered access for all Northern Ireland businesses selling into Great Britain and the proposed all-island food safety sanitary and phytosanitary zone.
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"We see this as at the very least a starting point from which we can move forward on other areas."
However, Mr McGreevy, whose firm employs 150 people in Northern Ireland and the Republic, said the continuing uncertainty meant that he had turned down the option of extending a contract with the Northern Ireland Housing Executive.
He said: "Brexit itself is leading us to decline contracts and delaying a lot of things in terms of our own investment. We're turning down extensions to contracts, particularly due to concerns around currency."
He said the company had 35 staff working on the repair contract with the Housing Executive, which it won with three other firms in 2016.
The contract was to have continued for 10 years, but Mr McGreevy said he refused a three-year extension because the uncertainty over Brexit made it harder to plan for the future.
The long-term contract provided for costs to rise according to the Consumer Price Index, but he said that did not give it enough of a safeguard.
"There is no Brexit-proofing within the contract and CPI does not capture the rising construction costs."
He added: "The whole Brexit issue is a shambles and the latest proposals have left us with more questions than answers."
He said it was likely that the 35 workers on the Housing Executive contract would transfer over to a new contractor.
A spokeswoman for the NI Housing Executive said: "The impact of Brexit is very much an unknown factor, however, the Housing Executive has taken steps with its various stakeholders to ensure any impact to the procurement process is minimised."
Brian Irwin said the proposals failed to address the customs and administrative barriers which businesses will face.
"Given the fact that the majority of businesses involved in cross border trade are SMEs, this is significant as many firms will not have the capacity to deal with the increased administrative burden," he said.
What business leaders think of PM’s plan
Richard Kennedy, chief executive, Devenish Nutrition: “The first thing I will say about the new proposal is, at least people are talking and looking for a deal, that’s positive, but on the flip side it’s naive to think that there won’t be significant costs from this. Those costs will put businesses out, they will make them unsustainable and unviable, and administrative costs in an industry like this where margins are tight are going to make a difference.”
Brian Irwin, chairman of Irwin’s Bakery, Craigavon: “It is welcome that the Government has tabled these proposals. In particular, we once again welcome the confirmation of unfettered access for all Northern Ireland businesses selling into Great Britain and the proposed all-island food safety sanitary and phytosanitary zone. We see this as at the very least a starting point from which we can move forward on other areas.”
Gavin Annon, head of sales and marketing at Mount Charles: “Mount Charles does not manufacture or export products/services, so the problems we are likely to face are much less than other sectors. Our issues will focus on ensuring continuity in the supply of raw materials (ie foodstuffs) and ensuring we can maintain the employment of the many EU nationals. The free passage of goods on the island of Ireland will be welcome, but the prospects of increased checks on certain goods coming into NI from Great Britain or beyond is likely to cause delivery issues, leading to increased costs.”
Rajesh Rana, director, Andras House Ltd: “I am deeply frustrated by the ongoing delay and failure to reach an agreement. The current discussions are just on the Withdrawal Agreement, which then needs to be followed by discussions on the new relationship with the EU. The biggest concern we have in hospitality and in most other sectors is the availability of labour. We need to start planning arrangements for attracting people to come to the UK and NI to work, in order to keep our economy growing and to deliver the skills that we need.”
Connaire McGreevy, chief executive, CTS Contracts, Warrenpoint: “The proposals there are at the minute I see as creating a lot of burdens on business because they create a double border. That’s very concerning for us as we operate on an all-island basis from Waterford to Coleraine. We have a lot of people moving north and south and although we did try to eliminate that post-referendum, it’s still going to cause a lot of hassle.”
Liam Duffy, chief executive and owner, The Classic Mineral Water Company: “I welcome the fact that the PM wants NI to remain aligned with EU’s single market rules for trade in animal, food and manufactured goods. I am interested in what the scope of ‘manufactured’ goods is? This seems very broad and I welcome that. I do not welcome any move to change the backstop whatsoever. The backstop is designed to keep free-flowing movement along the border.”
Interviews by Emma Deighan and Mark McConville