LENGTHY delays in the planning process are dissuading foreign projects from locating in Ireland, the Construction Industry Federation has claimed. It also forecasts that construction output will grow by 6 per cent this year, a significant reduction on last year's performance.

CIF's director general, Mr Liam Kelleher, said yesterday the planning process is not keeping pace with economic development, and the issue must be addressed at Government level. He called for the system to be reviewed to minimise delays which discourage investment and reduce competitiveness.

"Unpleasant as it may be, the truth is that Ireland's competitors for major inward investment projects - countries such as the UK, France, Germany and Holland - have planning processes which are development plan led.

"In other words, provision is already made in those countries planning processes for large scale industry," he said. He added that, once a development is compatible with what is contained in the development plan, it will go through without recourse to third party objections and this usually means a two month timeframe.

He was speaking at the introduction of the CIF's strategy for developing the industry this year.

The CIF's president, Mr Kevin Kelly, said the real delays are occurring when third party appeals are lodged against planning permissions. He said when applications are made initially to the local authorities, the planners often leave it until the last day to seek further information on planning applications.

"There should be a maximum period, say within one month of an application being made, during which planners can seek additional information," he said.

Mr Kelly said that although the planning system had improved greatly in recent years, areas should be designated for particular usages and objections made only then.

The CIF said yesterday that it expects the industry to grow by 6 per cent, down from the 1996 level of to per cent.

Mr Kelly said general contracting and civil engineering are both expected to grow by 10 per cent, and housing by 1 per cent. Last year general contracting grew by 19 per cent, civil engineering by 6 per cent and housing by 13 per cent.

He maintained that the industry was catching up after the bad years of 1991-1994. "On both the general contracting and civil side there has been significant underinvestment in infrastructural projects since the early 1980s," he said.

Mr Kelly said 20,000 additional jobs will have been created in the industry in the period 1993-1997 and a further 10,000 jobs indirectly. He said a further 15,000 jobs would be created if the present high levels of investment and current budgetary policies are continued.

He called on the industry to increase its profit margins. He said a survey he carried out last year showed construction firms were only making 1.5 per cent profits before tax. He said this should be at least 7-8 per cent, to allow for investment in training and new machinery.

Mr Kelly said the industry was very competitive and some firms were still tendering for contracts at very low margins.