The significant shortage of houses in Ireland has been well publicised in recent years and indeed was one of the driving forces behind the ‘Rebuilding Ireland Action Plan for Housing and Homelessness’ and the more recent ‘Project 2040 National Planning Framework’.
One of the five central aims of the Rebuilding Ireland Action Plan is increasing the housing supply. Can Modern Methods of Construction (MMC) play a role?
What is MMC?
The definition published in the UK by the Ministry for Housing Communities and Local Government is a useful guideline. It identified seven categories of MMC:
- volumetric modular
- structural panellised
- off-site components
- additive manufacture
- non-structural assembles and sub-assembles;
- off-site building material improvements
- on-site process improvement
Effectively, MMC describes an approach to constructing buildings more quickly, reliably and sustainably by methods such as off-site manufacturing, modular construction panels with timber or light steel framing, structural insulated panels or cross-laminated timber.
Benefits of MMC
|Time||MMC saves a significant amount of programme time as construction of modular units can take place off-site in conjunction with the on-site/structural construction. Also as the majority of the construction work is carried out off-site and indoors, external factors such as inclement weather do not delay construction. Process production and repetition of process can also increase productivity, create efficiencies and reduce labour hours.|
|Sustainability||Investors are progressively concentrating on sustainability as a key metric in the performance of their portfolio. Lenders are also increasingly viewing it as an important performance indicator for borrowers to achieve.|
MMC in Irish construction industry
If the Irish industry is to meet the challenging targets outlined in government housing initiatives and the increasing demand for high quality and affordable housing, MMC could be an attractive option. The adoption of MMC may also be an effective way for developers to meet the sustainability metrics that funders and investors are increasingly seeking.
In general, the Irish construction industry has been relatively slow to adopt MMC. A reason for this may be that most construction firms in Ireland are SME’s and would need significant support to utilise and implement MMC, particularly given the associated costs and labour shortages (which has been intensified by the COVID-19 pandemic). However, conversely, the COVID-19 pandemic has the potential to accelerate the modernisation of the construction industry. Although the delays caused by COVID-19 reduced productivity, the industry may experience an increase in the use of MMC to regain momentum and programme certainty and ultimately mitigate any future delays.
From a legal perspective, MMC introduces a number of interesting contractual considerations such as: ownership of off-site material, insurances and transit risk, insolvency risk of suppliers, defects in modular units (and liability) and regulatory compliance (e.g. building regulations). It will be interesting to see how such considerations evolve and manifest in development agreements and other construction contracts in respect of future MMC projects in Ireland.
For further information on this topic contact Siobhan Kearney, Senior Associate, Conor Owens, Partner, or any member of A&L Goodbody’s Construction and Engineering team.