What price to support economy?
Monday 20th June 2011, 2:30PM BST.
Publication of Public Services’ Billet d’Etat report on airport refurbishment work has generated concerns for two reasons.
The first is the need to bring up to 150 staff here at some stage during the two years the project will take and the second is whether, or to what degree, Lagan Construction will use local resources.
In all, Lagan is responsible for £55m.-worth of the £80m. contract, so how it operates will be crucial in determining how much of the spend – the most expensive capital project undertaken by government – will be retained locally.
It is also difficult to understand why the company was unable to say last week whether it will use local contractors and suppliers or not.
Materials and labour will be the two main factors affecting the price of its work and its bid was acknowledged to have been of high quality.
It did not pluck its figures from the air.
Ronez has been approached but, in the absence of a deal, Lagan must have based its tender price on importing aggregate and, since the quarrying industry in the UK has been decimated by the recession, will have had access to competitive prices and a sector where transport is largely in the hands of self-employed truck owners also desperate for work.
To what degree, if any, Lagan goes local will be more complicated than simple headline prices, given the logistics of shipping and stockpiling materials here.
But perhaps one of the more important, unresolved, issues is what cost penalty government and the island are prepared to pay to keep trade in the island.
For the States, cheapest is best, irrespective of whether any of the money it spends remains and is circulated here.
For many businesses, however, a percentage premium roughly equivalent to shipping costs is worth paying simply to be a good neighbour supporting this community and the economy.
Unfortunately, the States has refused to contemplate going down that path.
And now, with £80m.-worth of taxpayer money about to be spent, that may well be short-sighted.
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