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Building contractors plea for state support

Costas Roushias, the president of the Federation of Associations of Building Contractors Cyprus (OSEOK), has called on President Anastasiades for an 11th hour rescue of the sector.

unemployed building contractorsTHE Federation of Associations of Building Contractors Cyprus (OSEOK) has issued a desperate plea for support to President Nicos Anastasiades, saying local contractors were “pinning their last hopes” on his intervention.

“A long-term life line for the economy of Cyprus, the construction sector has long contributed to the Gross National Product at around 7% and made a significant contribution to employment, at around 10%, but is now at the stage of complete deterioration,” a letter to the President by OSEOK President Costas Roushias says.

He continued that “the construction sector has been abandoned to the mercy of the times while the lack of cash flow and the rapidly destructive developments in the fiscal system continue to prevent us from going ahead with pre-announced measures to restart the economy. A precondition of this is the restart of its strongest contributor, the construction sector.”

Roushias called on Anastasiades to take four courses of action including providing government-backed guarantees for construction companies to take on projects overseas, something OSEOK said had been done in 1974.

The federation also called for the banks to return to their usual operation “so that taking on self-financed projects could become possible again.”

OSEOK also suggested the creation of a Guarantee Mechanism and for new projects either using any remaining tourism industry funds for the construction sector or by going ahead with making government-owned buildings more energy efficient.

The federation noted that the dramatically shrinking construction sector had led to many seeking work overseas where they also encountered difficulties.

“The largest percentage of contractors have either given up the profession or seeking work overseas” Roushias said, particularly because of banking restrictions.

He continued that only a small number remained active with some operating at a loss “hoping for even an 11th hour rescue of the sector by the state.”

contrractor pleas for help

Readers' comments

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  • DaveC says:

    If any money is to come from the state, it should be given to the property buyers who were scammed by members of OSEOK and others.

  • andyp says:

    People would like to buy but wont.
    People would like to sell but can’t.

    The world, seemingly excluding Cyprus, knows why.

    Give me a hand out to carry on as normal will be of no help whatsoever.

    Until this government resolves the title deed scandal,prosecutes developers illegally selling property and similarly prosecutes lawyers and bankers involved in fraud against buyers this whole property industry must,and deserves,to and will die. And rightly so.

    All very well and sad about employees but what about the victims? Did any of them speak out?

    Cyprus could not care less, yet.

  • @Steve – Thanks – I hope my book was of some help to you. Considering it was published before the property boom got underway it’s surprising how few people were willing to shell out £16.45 for a copy.

    For a short the book was Amazon’s number 1 seller – here’s a snapshot of Amazon’s listing including the comments.

    In 2004 Amazon decided to stop selling e-books and that’s when I taught myself how to create websites and set up Cyprus Property Buyers.

  • @aggis – thanks for your comment. Maybe Mr Roushias should contact Phileleftheros?

  • Steve says:

    @ Nigel

    Nigel, you are an example to us all. I bought a book to quell my suspicions that I was not equipped to go into the jungle that is Cyprus and come out alive. A reader on Amazon UK described it as “Easily the best books on buying property abroad.” When I look, all the warnings are there, but not couched in the black and white terms that you employ, so I and other readers could choose to look on the bright side.

    Back in 2003, there was room for the benefit of the doubt that does not exist any more. That is all that has really changed in the meantime and so the Cyprus property industry has gone from a thriving money-making scheme to a dead duck.

    Quack quack.

  • Stuart says:

    I have to agree with Robert Briggs’ comments below.

    Local builders, sub-contracted to developers, surely must have known the game-plan that was going on in Cyprus through their industry contacts and local knowledge.

    Local knowledge alone would have told a few of them that their particular building project would eventually one day slide down the hillside, yet construction continued unabated.

    As The Book also states: “Seven years of plenty will be followed by seven lean years”, so these guys may be crying in their beer yet a while.

  • aggis demetriou says:

    I phoned Mr Roushias and highlighted the problems why the building industries is in a mess and its not what he is suggesting in his write up in the daily paper. If I had titles to all my properties I would have sold 8 last year to overseas buyers:

    Read below

    The Federation of Associations of Building Contractors Cyprus (OSEOK) has issued a desperate plea for support to President Nicos Anastasiades, saying local contactors were “pinning their last hopes” on his intervention.

    “A long-term life line for the economy of Cyprus, the construction sector has long contributed to the Gross National Product at around 7% and made a significant contribution to employment, at around 10%, but is now at the stage of complete deterioration,” a letter to the President by OSEOK President Costas Roushias says.

    He continued that “the construction sector has been abandoned to the mercy of the times while the lack of cash flow and the rapidly destructive developments in the fiscal system continue to prevent us from going ahead with pre-announced measures to restart the economy. A precondition of this is the restart of its strongest contributor, the construction sector.”

    Roushias called on Anastasiades to take four courses of action including providing government-backed guarantees for construction companies to take on projects overseas, something OSEOK said had been done in 1974.

    The federation also called for the banks to return to their usual operation “so that taking on self-financed projects could become possible again.”

    OSEOK also suggested the creation of a Guarantee Mechanism and for new projects either using any remaining tourism industry funds for the construction sector or by going ahead with making government-owned buildings more energy efficient.

    The federation noted that the dramatically shrinking construction sector had led to many seeking work overseas where they also encountered difficulties.

    “The largest percentage of contractors have either given up the profession or seeking work overseas” Roushias said, particularly because of banking restrictions.

    He continued that only a small number remained active with some operating at a loss “hoping for even an 11th hour rescue of the sector by the state.”

  • Peter Davis says:

    Why should my taxes be given to individuals who want to retain their lifestyle at my expense?

    Why not give cash to the car dealers, they’re also suffering? Why stop there must be other causes?

    50,000 empty and part built houses/developments litter the Island. So yes we need more.

    I went to Latchi last week to see it so run down and so many shops had closed, and opposite these empty shops? Yes you guessed right were more being built.

    These people want my taxes to maintain their standard of living. Well retool, retrain and learn another occupation.

  • @Steve – We bought land and hired an architect (member of RIBA) to turn our design into something that wouldn’t collapse around our ears and to oversee the construction work. We bought the land 10 years previously.

    Once we’d finalised the design we issued Invitations to Tender to 6 local building contractors. The one we selected was excellent and we’ve been living in our house for 10 years with no problems.

    After taking delivery we kept a record of minor things we spotted – the decorator has missed a coat of paint in one of our bedrooms, a wall tile in our shower room cracked and black spots appeared on one of our wall mirror. The contractor came back after a year and fixed them all.

    We also sub-contracted the mechanical engineering work to a specialist company – and selected and bought all the fixtures and fittings ourselves (with the exception of the bathroom cabinets and electrical sockets).

    The workforce were all Cypriot and all did an excellent job.

    Another house was being built at the same time as ours and I used to sneak onto the top floor to take photos of mine as it was being built. The labour force couldn’t speak Greek or English and when the couple took delivery they had no end of problems with leaks from water pipes and water entering the property when it rained – they eventually sold. About 2 years ago the family that bought the house had to have the roof replaced and an electrical fault wrecked nearly all of their appliances.

    From a conversation I had a few years ago with someone in Paphos who was looking to develop their large plot of land near the coast, developers were paying contractors a fixed price/sqm which resulted in much shoddy work. And a Cypriot friend of mine who is a landscape gardener told me that he was invited to design and plant gardens for some villas for a fixed price of CYP 1,200 a garden. He refused and subsequently learned that the developer was charging his customers CYP 16,000 to have their gardens designed and planted.

  • Richard says:

    I agree with some of the comments here – I don’t think the actual contractors are the real villains of the piece. They didn’t create the ‘market’ for property (or bubble if you prefer). Whilst our house was being de-snagged I had a good working relationship with the actual boots on the street (many of whom were treated quite shabbily by the ‘developer’). They were amongst some of the most helpful people I’ve met on the island – and if I hanging over a cliff – I’d trust many of them a lot more than most of the slimy white-collar scum we’ve encountered.

    In all cases of hardship – it’s the ordinary labour that suffers.

    I hope they are helped in some way actually – and if the money to pay for their rescue plan was torn from the grasping clenched tight-fists of those who created this mess, I’d be the first to stand on a chair and cheer.

    The only proviso would be – don’t support industries long-term that are shot. It’s ALWAYS a mistake. Re-think – Re-train – Re-engineer.

    You’ll excuse me if I don’t hold my breath though short-term…?

  • Steve says:

    The Germans call it “Schadenfreude” – to take pleasure in someone else’s pain or misfortune. I have seen no evidence that the actual sub-contracted builders were involved in the evils perpetrated by developers, banks and some members of the legal profession. The sort of fiddling some have complained about here is what builders everywhere do. Sensible buyers hire an architect or building consultant to oversee the construction work and regard the extra cost as well spent. Even after completion, there is time to commission someone to inspect the work and draw up a snag list. Those same sensible buyers refuse the offer of free use of the developer’s legal team, for the same obvious reasons.

    In the UK, the baby-sitting agencies will come to the rescue – I just had a letter telling me the government is going to assess compensating me for the pension I lost in the Equitable Life debacle, almost 20 years ago- but in Cyprus it doesn’t work like that.

    Just remember, if the subcontractors are going under, the developers are not far behind. I have no developer’s mortgage on my apartment; my (Cypriot) solicitor checked it twice, but I also have no title deeds and if the developer goes under, then I may lose my apartment and become just another creditor. There is no baby-sitting agency in Cyprus to rescue me and the many others like me.

    Then the “Schadenfreude” brigade can have a field day.

  • John Swift says:

    If it is the developers who’re at fault how come they’re not in court facing lengthy prison terms along with confiscation of all their assets?

  • @Whirlybird – thanks for your comment but please see my earlier message about who these contractors are.

  • Whirlybird says:

    What a bare faced cheek these contractors have, they do want it all ways. First they cheat us thus stopping us from getting our title deeds then some of them go into receivership allowing us to pay their state debts now they go demanding the government to help them start again. All this to help line their own pockets on top of what they have stashed away in family businesses etc. Come on Cyprus get a grip on these further scams. I say further scams because they are not new.

  • Milo says:

    I have to take up the part which states the construction industry had given 10% towards the employment sector of Cyprus…Really?

    I watched as Turkish Cypriots and Indians mostly built mine, and others brought in cheaply from eastern Europe put in empty apts ten at a time, paid peanuts and then as we all know dumped when the construction industry slowed down….

    Don’t I remember the Indian govt sending over planes to take home many thousands Cyprus no longer wanted….

    It made some locals fatter, but it didn’t give jobs to its own people in that quantity as like in the Middle East many preferred cheap slave labour….

    Now they cry….when no one wants to help…we had a Cypriot electrician to do the electrics on our house, I think apart from the carpenter he was the ONLY Cypriot apart from the developer to do the building work, the pool tiler was….a Bulgarian woman….and she did a great job btw!

  • Suzanna says:

    Maybe if the Contractors had not been so greedy and constructed better quality housing they would not be in such a mess now. How many buildings have not got Title Deeds because of “infringements” by the Developer.

    They made their millions in the boom years and now they owe millions (to the Tax Department for one in unpaid IPT)

    I for one have no sympathy with them at all.

  • Robert Briggs says:

    @ Messers, Mr Gavin Jones; Mr Nigel Howarth & Mr Pete.

    As The Book states:

    ” That which has been sown, so shall be reaped.”

    Even the builders, sub contracted to the developers, through their local contacts & knowledge, must have been aware of what the score from day 1? Perchance? cutting corners for optimum profits, during the “good times”, and as far I can perceive, in league with the developers, lawyers, senior bank officials, politicians, et al.

    I am afraid that these Entities just cannot blame the total collapse of the Cyprus Real Estate “Industry” just upon the credit crunch, circa 2007.

    Since all the other horror stories are now exponentially emerging, on the websites / media, et al, about the Title Deed scandals + the other gross malpractices involved in dealing with property in Cyprus, so in the main, no one is touching any property here with a bargepole, due to its ghastly reputation.

    Yours Sincerely, Bob Briggs

  • Janner says:

    I thought the state was skint. Wasn’t that part of the problem? Propping up a false economy using public funds or assets that really should belong to its rightful purchaser. Let’s not go there again!

  • Pete says:

    Agreed Nigel, but these same people are also, or partly, to blame for shoddy workmanship and corner cutting.

  • @All – Before we get carried away and blame the building contractors for the woes of the industry, these guys are employed by property developers (and others) to carry out the actual construction work.

    They too are victims of the Title Deed fiasco-cum-fraud mess.

  • Gavin Jones says:

    Is the President going to intervene in restoring the health, sanity and financial well-being of the thousands of people who’ve been duped by these very same building companies which have failed to deliver title deeds because they, in conjunction with banks and lawyers, have saddled their clients with hidden mortgages?

    Thought not.

  • Costas Apacket says:

    Until the obvious and usual elephant in the room blindness syndrome is lifted from the eyes of these people the construction sector will continue to dwindle into nothingness.

    Good!

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