Opposition spokesman on the infrastructure Charles Buhagiar yesterday underlined the difficulties the construction industry - which contributed 13 per cent of the GDP - was facing, saying that this had been left in an archaic state.

Speaking during the debate in second reading of the Bill providing for the Building Regulation Act, Mr Buhagiar said that around 76 per cent of contractors were considering reducing their workforce.

He said NSO statistics confirmed that the construction sector faced difficulties: compared to the first quarter of 2009, employment within the sector had decreased by 9.9 per cent in the first three months of this year, wages and salaries declined by 2.6 per cent and the hours worked decreased by 9.4 per cent. Around 1,200 people had lost their job.

Building permits for new residential property declined by 39.9 per cent. This was also the result of the announcement of the increase in Mepa fees because the government had withheld its subvention. As an example Mr Buhagiar said that the fee for a compliance certificate would, from Friday week, become €60 from the present €11. As a result, less property was being sold.

The property market was one of the main factors within the construction market. Tax collected through property sales was around €110 million in 2008, decreasing to around €70 million in 2009 - a reduction of €40 million. Promises of sale have also decreased.

Permits for the acquisition of immovable property by non-residents, known as AIP permits, had also decreased. There were 400 permits in 2005, 399 in 2006 and 476 in 2007. But there were only 157 permits in 2009. Property selling had decreased also with regard to foreigners.

In these circumstances, Mr Buhagiar said, developers were not incentivised to make new developments. Banks made it difficult for developers and this had also affected foreign developers who tried to operate locally.

The government should have tried to improve the construction sector's situation. While the GRTU had proposed 21 measures to help the sector, the government did not do anything.

As the GRTU had stated, developers would recover increases in Mepa application fees through property prices, affecting the end user, especially first-time buyers.

Fees should not have been increased when the construction sector was facing such difficulties. This placed more burden on the sector, he said. While this sector should be regulated, it was not being regulated enough.

Mr Buhagiar said that the issue of registration of contractors had been debated for several years. Eight years ago, former Minister Francis Zammit Dimech had said that the bill was being scrutinised by the Attorney General. Thus, parliament was debating something that should have been enacted eight years ago.

Since there was no control over contractors, someone could present himself as being a worker. Many foreign workers worked in this sector in an illegal manner. Both contractors and workers should be licensed, Mr Buhagiar said. Aptitude tests could assess the workers' capability.

There was total anarchy in the way the sector operated. There was the need for serious enforcement. Licences should be en-forced and where there were no licences, these needed to be introduced.

Contractors needed to be registered. This problem also emerged in tenders where small contractors bid for large projects even though they did not have the necessary capacities and expertise. While the government was normally obliged to award the tender to the lowest bidder, where the lowest bidder did not have the necessary capacity and expertise, the project would neither be concluded by the deadline nor would it be of good quality.

By classifying contractors, one would know the capacities of contractors, their exper-tise and experience amongst others. Contractors would still have the chance to improve their position in such classification.

Mr Buhagiar said the Building Industry Consultative Council (BICC) had already, in 1998, came up with a building control act, a building regulations act, and documents which dealt with lifts and safety in use. He said that it took a long time for parliament to arrive to the present stage.

Much more needed to be done with respect to enforcement of regulations protecting third party rights.

Enforcement needed to be ensured as well in the area of regulations which dealt with demolitions and excavations. The present situation, he said, put added pressure on neighbours who had to scan the method statement issued by the developer's architect and, if need be, hire an architect themselves in order to make a technical overview of the method statement in question. These were costs which had to be incurred by neighbours to protect their property from damages.

Mr Buhagiar asked whether a way could be found as an alternative to this method in order to reduce expenses to neighbours living next to a building being demolished, even though nowadays those developing needed to be insured.

Interjecting, Resources Minister George Pullicino said there needed to be a bank guarantee which would cover, in worst case scenarios, the threshold decided by the insurance.

Continuing, Mr Buhagiar said that although the bank guarantee was a good idea, there were still difficulties on how the bank guarantee was to be accessible and how this would work. He affirmed that the importance of regulations which dealt with demolition had to be inferred from the fact that new buildings were redevelopment.

Turning to health and safety in the construction industry, Mr Buhagiar called for extra care and harsher regulations since incidence of accidents at work was still very high. There was still lack of care on the subject and a way forward needed to be ensured, this also when some workers themselves did not wear protective clothing. The machinery used needed to be in a good condition, and checks had to be made frequently. He also felt that a license needed to be introduced for those who made use of tower cranes ensuring controls on safety.

The Bill specified that the board of appeals had to decide matters within three months but, he asked what would happen once this time-limit was not observed.

Whose duty was it to check the information given by applicants in the commencement notice? It was common knowledge that false information was given by applicants. The Bill also said that a public deed had to be entered into between the developer and contractor before works started. However, the clause did not go any further and did not say whose duty it was to see if in fact such a public deed existed.

Mr Buhagiar called for more enforcement with respect of EU directives which applied to Malta in this sector.

The Construction Product Directive laid down standards on local materials used in construction. He said such certification was not being issued with regards to pre-stressed slabs (planki). A whole system of checks and balances needed to be set up.

Lack of initiative could also be found with respect to regulations dealing with energy-efficiency standards. Since last year, the directive came into force with regards to residential buildings and in 2011 this would cover all property.

Concluding, Mr Buhagiar said the opposition fully agreed with the Bill but he called for streamlining to avoid no duplications between different pieces of legislations.