NAMA risks stifling the already struggling construction industry if implemented to the Government's current plans, according to the Construction Industry Federation.
The Government plans to cleanse banks such as Bank of Ireland and AIB of risky commercial property loans with a total book value of €77bn to kick start lending and boost the recession-hit economy.
The National Asset Management Agency, which will take over both performing and non-performing loans from banks, could end up holding more assets than any listed property firm in the world.
The operation will have implications for markets in the UK and the US and it will tower over the entire commercial property sector in Ireland, and the CIF said its near-monopoly position could have dangerous consequences.
'As NAMA will control all securities and equity, existing experienced borrowers will be excluded from trading in the property and development marketplace,' CIF Director General Tom Parlon said.
'This will restrict the market to capital funds and syndicates of non-development/construction professionals, which from the construction industry's perspective contributed in no small measure to the difficulties in which we now find ourselves,' Mr Parlon said in a statement.
The NAMA plan got a boost over the weekend when the governing coalition's smaller member, the Green Party, voted to support the scheme.
The CIF said it did not oppose the setting up of NAMA in general but it called for changes, criticising in particular plans for a windfall tax on land transactions, which was included in the NAMA blueprint due to Green demands.
'The entire NAMA project is predicated on the need to get liquidity flowing again to support the normal economic life of the country,' the CIF said.
'As more details emerge, however, there is a growing sense that NAMA could have the opposite effect by essentially freezing working capital for construction employers.'
The Department of Finance has responded by saying that the position of the CIF now shows that NAMA is not a bailout for builders.
A spokesman said that sustainable companies would have no problem obtaining loans from the normal banking system and would not need to rely on NAMA for additional funding.
