€ 5 billion | The extraordinary cost of S.I.9 self-certification by 2020

by Bregs Blog admin team

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In a previous post “The extraordinary cost of BC(A)R S.I.9 of 2014” we attempted to summarise the possible costs of S.I.9 to the consumer and industry. Now, seven months post implementation, not only are we seeing the continued drag on commencements, the “BC(A)R effect”, but we’re also better able to quantify the costs of the newly introduced regulations. We note at the time of writing, commencement notices lodged with the BCMS are running 30% below 2013 levels, a historic low for construction activity.

The BReg Blog has attempted to bring all of the relevant S.I.9 cost posts into one here. Included also is the Department of the Environment’s projected total cost for Pyrite for pre-2012 projects. This figure may be a lot higher. As the current construction industry recovery takes hold the annual costs for S.I.9 will increase in tandem with increased output. The following table is based on 2012 detailed outputs which was a historic low point. Costs exclude future pyrite/mica remediation and once-off taxpayer costs (e.g. €30m for Priory Hall to date).

We know that self-regulation was looked at in the U.K. in 2012, but dismissed as the most expensive form of building control to the consumer and industry (see post below). A proper Regulatory Impact Assessment (RIA) would normally quantify figures like the table below in advance of implementation of any new regulation. Unfortunately in the case of S.I.9 no comprehensive RIA was undertaken in 2013.

ESTIMATED ANNUAL COST 2014 FOR BC(A)R SI.9

Private Residential Projects (€2.464bn qualifying)

  • Self-build houses abandoned =                €144m
  • Increased costs for self-builders- =          €181m
  • Increased costs for consumer =                €181m
  • Delays due to validation procedure=       €26m

Subtotal Residential annual cost=                     €532m 

Private Non-Residential Costs (€606m qualifying)

  • Private non-residential =                           €66.4m
  • Social Infrastructure=                                €67.7m
  • Productive Infrastructure=                        €33.7m
  • Subtotal non-residential projects=            €168m

Total BCAR SI9 cost (2014)=                              €700m

Once-off Pyrite Cost (pre-2012 only)                 €784m

*Pyrite remediation at €64,000+ per house for 12,250 pre-2012 properties affected: €784 million

The cost of continuing with our current system of self-certification of our construction industry i.e. S.I.9, with little or no independent local authority inspections or market policing of materials by 2020 (ex future pyrite/mica issues) is estimated at almost €5 billion.

This equals 50,000 construction jobs lost by 2020.

Other posts of interest:

SI.9 to Cost €168m in 2014 | Non-Residential Sector

SI.9 to Cost €532m in 2014 | Residential Sector 

SI.9 costs for a typical house

Pyrite: the spiraling cost of no Local Authority Inspections

Inadequate Regulatory Impact Assessment for S.I.9- Look Back 2

Karl Whelan: “…raft of cost-increasing building regs are at least partly responsible”

A ‘perfect storm’ for housing? 

The extraordinary cost of BC(A)R SI.9 of 2014

The cost of a Solution to BC(A)R SI.9? 

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