Construction industry generates €145 million, employs 12,500

The construction industry in Malta and Gozo generates €145 million annually or 3.4 per cent of the GDP, employing 12,370 people on full-time basis, or eight per cent of those gainfully occupied.

Introducing the second reading of the Building Regulation Bill, Resources Minister George Pullicino quoted NSO statistics which showed that the sector was still expanding and its activity had increased by six per cent over the last five years. Over the same period, the average investment in the sector had varied from €7 million to €1,000 million. This showed that the multiplier effect of the construction industry was still strong.

The Bill provides for matters relating to the registration of construction tradesmen and contractors and to the construction of buildings. It also introduces a Building Regulation Board and the setting up of a procedure for appeals against decisions taken by the Director Building Regulation Office or the Building Regulation Board. Other matters connected with construction, such as services, are also covered.

Mr Pullicino said the Bill had been on the planning board since 2000 and one had been drafted in 2003.

Wide consultation had been undertaken with the Building Industry Consultative Council (BICC), which represented 22 public and private entities, NGOs and the public.

Minister Pullicino said that the Bill was proof that the government was committed to guarantee quality. It was an enabling law that brought together various pieces of legislation under different laws while consolidating regulations and enforcement.

He said redevelopment activity had increased substantially over the last 20 years.

In 2007 he had published environment regulations on managing construction sites which was the responsibility of Mepa. These regulations would now be monitored and enforced by the building regulations office established under the Bill.

Other regulations for the construction industry included a legal notice dealing with increased performance in the use of energy. New buildings had to conform to the guidelines published under this legal notice. Energy performance certificates would be issued.

The Building Regulations Board would be composed of seven persons chaired by an architect with at least eight years experience, two persons (one nominated by the Chamber of Architects and the other by the Professional Engineers Chamber) and four other members experienced in building construction or health and safety or building services. The Board would also have an appeals function.

Builders would be required to sit for exams to obtain a building licence from the Building Regulation Office.

The Bill would allow for the amendment and updating of regulations without necessitating the fulfilment of parliamentary procedures for the enactment of laws.

The first section of the Bill regulated the registration of contractors. Here, the Building Regulation Board was expected to issue regulations to provide for the issue of licences and the registration of contractors.

Through this registration, the Board would officially acknowledge the contractors' capacity to perform work or supply material for the building construction industry.

Minister Pullicino indicated that the classification of contractors would also facilitate public procurement and protect the safety of employees and their employment. Contractors would be classified according to their resources in relation to size of projects. Contractors would also be allowed to move from one classification to another.

The second part of the Bill spoke of building regulations and specifically of the method that was to be used in works undertaken.

The 1980 legislation dealing with the control of property prices would be abrogated.

The Bill required a person engaging a contractor or a building tradesman to enter into a written agreement indicating the price for materials and for the work to be carried out. This would leave the market free to establish prices. At the same time, the requirement of a written agreement would also do away with the difficulties that currently arise.

The Building Regulation Office was expected to provide regulation standards or codes of practice on at least 19 issues specified in the Bill, which issues today created difficulties. These would include regulations that addressed the use of energy, fire precaution designs and fittings, structural strength and stability of buildings.

He referred to the need to establish regulations on sound transmission, noting that persons were today living in places which were developed without any attention to noise nuisance to the residents. He also queried whether it was time that certain developments have their own bring-in sites and waste management systems.

Mr Pullicino emphasised the need for reasonableness in regulations whereby the characteristics of the building were to be considered. He said that the building and construction industry needed to follow a continuous transition.

The first regulations that would be issued by the Building Regulation Office would address the avoidance of damage to third party property. These regulations have already been discussed and are expected to protect third parties from any damage caused to them through building and construction.

Persons undertaking construction would be required to submit a report to the Building Regulation Office indicating the procedure that would be followed in the works. Should this procedure not provide sufficient safeguards or not be followed, the Building Regulation Office would be empowered to stop the works.

Those carrying out works would be required to have an insurance policy to provide for damages that may be caused to third parties. Contractors would also be required to provide a bank guarantee, from which third parties might be paid. Disputes of this nature would be determined by mandatory arbitration proceedings.

The third part of the Bill empowered the minister to make regulations, providing for matters of procedure. The Bill created an administrative framework to the Building Regulation Office.

Minister Pullicino said that those in the building industry should respect themselves and those who were affected by their activity. There was the need to implement a culture to cause others the least level of inconvenience possible. While it was impossible to eradicate all inconvenience, one should seek to reduce it.

He said that there was the need to improve the quality of construction. This would be beneficial to the contractor as well as to first-time buyers, especially young couples. One should ensure that the limited resources were used in the best way to monitor and enforce the regulations effectively.

Concluding, Minister Pullicino said that regulations should be implemented to enable the building industry to expand as this was a very important sector for the Maltese economy.