Developers say construction levies will strangle economic recovery

Local authorities are threatening to strangle the economic recovery by trebling levies imposed on commercial and industrial construction, claim developers.

The Construction Industry federation says the charge of €100 per square metre which is being proposed by the four Dublin council and Wicklow County Council will make businesses think twice before expanding their operations or setting up in Ireland.

A spokesman for the CIF said that the levies would amount to a charge of between €460,000 and €1.8 million on the average industrial development.

"These increases undermine Ireland's ability to compete for foreign direct investment and impact negatively on indigenous innovation and enterprise," said CIF director Mr Don O'Sullivan in a submission to Dublin City Council, which reflects those already made to surrounding authorities.

The lobby group says levies stood at €33 per square metre at the end of 2002. This rose to €49 in January 2003.

Mr O'Sullivan said there is concern among developers at how the figures have been arrived at.

There is also anger that councils can levy charges for projects despite the existence of funding from the European Union or the Exchequer.

There is no appeal against rulings by local authorities on the commercial development contributions under the Planning and Development Act 2000.

However, the CIF has refused to rule out a legal challenge.

Local authorities have until March next year to set the levy structure to provide funds for the development of roads, water and drainage, parks, community facilities and urban regeneration over the next six years.

The cost levied on developers can relate only to that portion of infrastructural requirements that are required by new developments.

The CIF is calling for the appointment of a regulator to check the validity of the infrastructural plans of local authorities and the associated cost estimates.

"There is no rationale to these estimates or to the way discounts are determined," said Mr O'Sullivan.

"When this regime was established, we felt it was a good idea but no-one in their wildest dreams though it would be an excuse to double or treble the amount charged to developers," said Mr O'Sullivan.