The other arm and leg: actual cost to consumer of 2014 Regulations (S.I.9 of 2014)? 

by Bregs Blog admin team

Industry estimates for the extra cost of SI9 have varied considerably. Consumer bodies and the Department suggest an extra cost for a typical house of between €1000 to €3000 (source: NCA Submission 2012; RIA 2012). Industry sources now suggest the real world cost of SI9 is conservatively at the upper end of this scale, possibly up to €5000 per dwelling for all professional fees. A €3000 extra cost on a €175,000 new-build once-off house is a little over 1.7% extra on the construction cost. Not much but in the macro context the total cost to the consumer for say 10,000 house completions in a typical year will be €30m. When we get to a “sustainable” level of house completions of 25,000 dwellings per year this will have risen to €75m. Quite an amount for little or no extra consumer protection.

In the commercial sectors industry estimates currently vary due to building type, level of complexity etc. However estimates based on the UK model would suggest an extra cost of between 0.5% to 1% of the construction cost of a project as a reasonable range.

Tom Parlon’s recent estimates on RTE suggested an increased construction sector output this year of €11.5Bn. This puts the cost for 2014 of SI9 at around €100m. This certainly puts the recent charity sector pay scandals and Irish Water consultant’s fees into perspective. The big difference is that SI9 will be a recurring cost to the consumer. Has a proper cost/benefit analysis been done on this?