AN ‘UNHEALTHY’ lack of developers in the Island is likely to contribute to rising property costs following the collapse of a major construction firm, the Housing Minister has said.
Deputy David Warr spoke after Camerons ceased trading with immediate effect, citing Brexit, Covid and the recent increase in costs as some of the factors responsible.
The Jersey Construction Council has said that the industry is ‘arguably less competitive now’ as a result, warning that the impact of this ‘may be felt by customers in due course’.
Deputy Warr said he ‘absolutely agreed’ that the reduction in market competition risked an increase in prices.
‘We have to recognise that, but having said that, clearly Camerons were unable to put their prices up to the extent that they needed to in a rapid inflationary-environment because of the nature of fixed-contracts.
‘I don’t think anybody can comprehend just how fast inflation has had an impact, so on the one hand one could say “why are they not mitigating risk?” but on the other hand one can recognise that this is an unprecedented situation,’ he added.
The company was working on the redevelopment of Bath Street and also building Andium Homes’ Cyril Le Marquand Court scheme, which has now been picked up by ROK Construction.
In this weekend’s Saturday interview, Andium chief executive Ian Gallichan revealed that negotiations with ROK had been taking place for ‘several months’ before this week’s announcement about Camerons.
He stressed that the contract was ‘back up and running again’ but admitted the housing provider was still speaking to subcontractors ‘to get them back on board’.
In a statement, the Jersey Construction Council said: ‘There are no winners from the announcement made by Camerons. The Government of Jersey, through its many organisations by far the largest client to the industry, must do everything it can to help sustain a vibrant and competitive industry through progressing with planned expenditure.’
Deputy Warr said: ‘It is unhealthy that we don’t have more developers. I think my bigger concern is actually the sub-contractors in all of this – dare I say the “white-van man” – who rely on this work to pay their bills. Unfortunately it doesn’t just stop at Camerons; it permeates right the way through the industry.’
Commenting on whether the collapse of Camerons would hinder the government’s plans to increase Jersey’s housing supply, Deputy Warr pointed out that there were several projects – including the recently-approved Ann Street Brewery redevelopment – being constructed by other developers such as ROK and Dandara.
However, he admitted that the pool of construction firms was ‘small’.
‘The consolation is that these [projects] have been signed off and they have gone through the planning process. The contracts have been agreed with the various development companies who are now able to get their shovels in the ground.’
In today’s Weekend Essay, business leader Kevin Keen says there has been ‘no joined-up strategy for housing’ from the Council of Ministers that could be properly resourced and implemented by the public service.
‘I have been told that one of the reasons for the lack of progress is that there are only two people in the Housing Minister’s department, which very sadly may be a better indicator of the urgency of this issue within the public service,’ he wrote.
However, Deputy Warr said this was a ‘very narrow view’ of the current circumstances.
‘That was the situation when I took over the portfolio from the previous government but that is certainly not the case now,’ he added, noting that the team had since tripled in size and was currently in the process of hiring additional staff.
‘It’s still a relatively small department but the Council of Ministers recognises its importance, and it can seek advice and support from other areas such as Treasury, Environment, Infrastructure and the Economics Unit,’ he said.
