THE CONSTRUCTION Industry Federation (CIF), the representative body for developers, has raised concerns about Nama’s capacity to lend to builders and to create a viable construction industry.

Tom Parlon, director general of the CIF, said there would be no functioning bank for the property development and construction sector if the Nama legislation was not changed to account for the industry’s lending requirements.

The organisation, which briefed more than 100 developers on Nama at a meeting in Dublin yesterday, criticised the Government’s decision to reduce Nama’s borrowing power from €10 billion to €5 billion in the draft bill.

“In our view Nama is going to require multiples of €5 billion,” said Hubert Fitzpatrick, the CIF’s director of development, housing and planning. Mr Fitzpatrick said the federation “didn’t have an assessment” on how much the industry would require to complete projects and for the working capital needs of the industry in general, but that it would liaise with Nama on the level it should be. We want to ensure that the industry can work on a co-operative basis,” he said.

The CIF has held talks with Department of Finance and Nama officials, he said, but no upcoming meetings had yet been planned. Mr Parlon said the CIF was concerned about the risk of market distortion arising from Nama’s monopoly position and the “likelihood for unintended adverse consequences” for property owners arising from the introduction of a 80 per cent capital gains tax on windfalls from land transactions.

“As Nama will control all securities and equity, existing experienced borrowers will be excluded from trading in the property and development marketplace,” Mr Parlon said in a statement.

“This will restrict the market to capital funds and syndicates of non- development/construction professionals which, from the construction industry’s perspective, contributed in no small measure to the difficulties in which we now find ourselves.”