Delays in Building 3000 Social Homes Across Ireland

The delivery of almost 3000 social homes across the country, 2000 of which are in Dublin city, will be delayed after the Minister for Housing pulled the plug on funding for a number of projects that were about to begin construction because of value for money concerns.

The Construction Industry Federation said the move could threaten the public private partnership model and have implications for projects such as Metro North.

Three weeks ago the Department of Housing decided not to proceed with almost 500 social homes in Dublin, Wicklow, Kildare and Sligo that were due be delivered by a consortium under the public private partnership model due to value for money concerns.

It is understood the cost of each of the units was more than one million euro and that figure had almost doubled compared to similar units that were delivered in 2020.

However, those with knowledge of the process say that just over half of the cost was for building of the units and the remainder was for the financing, managing and maintenance of the units over a 25-year period.

The first phase of these social homes were due to be delivered in 2027 and 2028. A further 1600 social homes due to be built in Dublin in this way will now also be delayed.

Rory Hearne, Social Democrats TD for Dublin North West said the decision was illogical and the first phase of the houses should have been allowed to proceed.

\"It makes absolutely no sense to pull social housing projects about to start on site in the midst of an emergency,\" he said.

\"People across this country who are literally languishing on housing waiting lists for years, people in homelessness who are going to get these social housing units, their hopes are now dashed and the minister really has to take responsibility for this and step in because what the government has done is it's intervened in a completely illogical way that scuppers these projects.\"

Cllr Daithí Doolan, Sinn Féin's group leader on Dublin City Council says the allocated funding for the project should be given to the Council to allow them to build the homes.

\"This is a disaster for Dublin,\" he said.

\"The minister is no longer not working with us.

\"He's now, in fact, working against us. We're calling on the minister to release the funding that was allocated for these sites in Dublin, give it to Dublin City Council and let us get on with employing developers and building the several hundred homes that are so badly needed in Dublin.\"

It is understood those involved had spent millions, lined up hundreds of workers and pre-ordered materials to start the first of these social homes this week.

There is said to be anger, frustration and disappointment by those involved in the process who were said to be blindsided by the unprecedented move and are now left in limbo until the Department's review is complete.

It is reported the social homes that were due to get underway had passed four value for money tests since the start of the tendering process two years ago.

Fears decision could impact Metro North plans

Paul Sheridan Director of Main Contracting, Construction Industry Federation says there are now fears the decision could now have implications for other PPPs such as Metro North.

\"What's actually happening at the moment is many of my members can't sustain their businesses here and they're actually looking to work abroad, whether in the UK, Northern Europe or Canada and America,\" he said.

\"Why? Because they simply can't get the pipeline to work from the Irish government at the moment in Ireland.\"

\"What's recently happened in regards to that particular PPP project, it's just sending another single to the market.

\"You can't have certainty here at the moment and if you want to maintain your businesses, and you've got to remember many of my members employ a lot of people, a lot of equipment, a lot of plant.

\"They can't just sit around and wait till the government finish the reviews. They have to keep their businesses\"

Fianna Fáil's Paul McAuliffe TD for Dublin North West where many of the houses were due to be built says the units, many of which were to be built in his constituency were costing more than a million euro each.

\"Previous PPP bundles were able to deliver value for money\", he said.

\"But if it's the case that the tender price is coming back at nearly double what previous bundles were, that would mean that we'd be talking about a figure of more than a million euro per unit over the 25-year cycle of the contract.

\"And that just isn't value for money. It's a crazy price.\"

\"I think the minister was right to pause and to not spend that money.

\"I think we'd have him in front of the Public Accounts Committee if he had but we what we need now is for an alternative delivery mechanism. It is an emergency, but that doesn't mean we can spend any amount of money that a developer asks for.\"

Decision reflects 'careful consideration' of costs, says Department

The Department of Housing acknowledged the potential impact on future projects and on the PPP model but it said it did not take this decision lightly In a statement it said the decision \"reflects a careful consideration of the costs and taxpayer funding\"

It said it is now reviewing social housing projects which have not yet proceeded to procurement. \"This allows the opportunity to assess how best to proceed in a manner that safeguards the long-term viability of these critical projects. This review aims to identify the most appropriate procurement and delivery vehicles for future bundles, with a view to ensuring the most efficient and effective use of public resources.\"

It also said it remains committed to accelerating housing supply.

\"The Department is absolutely committed to delivering vital social homes across the country,\" it said.

\"We continue to support a sustainable pipeline of work and welcome further dialogue with industry representatives to support the continued work of the social housing programme.

\"Record numbers of social and affordable homes have been delivered in recent years, and the Government will continue to work with all stakeholders to accelerate housing supply across all tenures.\"