Construction firms say they “welcome” a review into concrete prices, which they say has proven the high price of the building material has been driven up by the States’ own fees and charges.
In a statement issued by the Guernsey Building Trades Employers Association, the firms collectively say these “long standing issues are not unique to the supply of concrete” and have helped push wider construction prices sky high too.
The Guernsey Competition and Regulatory Authority reviewed the price of concrete, and confirmed that prices are higher in Guernsey than in the UK.
Despite Ronez being the only supplier of concrete on-island, the GCRA said the high price is not the company’s fault – as the reason behind the pricing is “likely to be structural and not down to anti-competitive behaviour”.
It has instead suggested that the States need to step in and develop ‘market-shaping measures’ to counter the problem.
The GBTEA agrees with that stance, saying the review has provided “much-needed clarity on an issue that has generated considerable discussion within the construction industry and more widely”.
“We welcome the report’s conclusion that it found no evidence of wrongdoing or anti-competitive behaviour on the part of the island’s ready-mix concrete supplier,” said the GBTEA.
“An independent review was the appropriate way to establish the facts, and we are pleased that the findings provide reassurance on this point.
“At the same time, the report highlights several structural challenges faced by Guernsey’s construction sector. These include the realities of freight and shipping costs, higher staffing costs, and the limited economies of scale that inevitably come with operating in a small island market. These are long-standing issues that affect the cost of construction across the industry and are not unique to the supply of concrete.”
The GBTEA claims some of the “long standing issues” include “many of the States of Guernsey’s own fees and charges”, which it says “are substantial drivers of building costs and have increased at a greater rate than any private sector supplier”.
While the GCRA’s investigation focussed on Ronez’s ready-mix concrete prices which have increased 48% in the last 5 years and 66% over the past 10 years, the GBTEA said over the same time periods, States harbour offloading charges have increased 70% and 87%.
It also said States inert waste tip fees have risen an “extraordinary 161% in the last 5 years and 226% in the last 10 years”.
These charges will all drive up on-island prices when they are passed on to contractors and then customers.
The GBTEA said it “supports continued dialogue between industry, and the States” to “explore practical measures” which may help drive down the price of concrete on island.
It said that transparency and competition can “help ensure a resilient and sustainable construction sector that delivers value for the island”.
