Legal proceedings have been initiated against the Department of Housing after it pulled out of a public-private partnership (PPP) agreement at the “11th hour” over value-for-money concerns, an Oireachtas committee has heard.
Last month, the department pulled out of the PPP projects in which a private investment consortium was to deliver almost 500 social homes in Dublin, Kildare, Sligo and Wicklow. The decision was made on a “value-for-money basis,” according to the department.
Minister for Housing James Browne initially told committee members on Tuesday he was not aware of any legal proceedings. However, he was later informed by department officials that a judicial review had been lodged.
Social Democrats housing spokesman Rory Hearne, who initially asked the Minister whether the preferred bidder for the PPP projects had initiated legal proceedings, said it was “jaw-dropping” that Mr Browne was unaware.
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While believing PPP “has a role to play”, Mr Browne, who would not speak further on the legal proceedings, said it must be “completely overhauled and re-examined”.
“It is an important route to be able to get homes that we need in the country but it has to be done in a manner that is fair to the taxpayer as well as giving value for money for the taxpayer,” he said.
Labour TD Conor Sheehan said the cancellation of the PPP projects at the “11th hour” has made the delivery route “essentially unviable”.
Separately, Mr Browne told committee members that it will be “exceptionally difficult” to meet housing targets in 2025. He said that while there was a significant increase in commencement notices last year, there was a sense that developers “turned their attention to further commencements as opposed to finalising the projects they were working on at that time”.
Some 60,000 commencement notices were lodged last year, an increase of 84 per cent from the previous year. This was driven largely by temporary development levies introduced to stimulate housing construction.
Mr Browne said there has been a consistent level of housing delivery predictions this year from different bodies “in and around the low 30,000s mark”.
“When you see that level of consistency, it’s difficult to disagree with. Certainly, it will be exceptionally difficult to meet our own target that was set out for this year, coming from such a low base,” he said.
Several committee members also raised concerns over new design standards for apartments, with Sinn Féin housing spokesman Eoin Ó Broin saying they will allow for “smaller, darker apartments with less amenities in sub-optimally planned residential developments”.
Several questioned how the changes would result in cost reductions of between €50,000 and €100,000 per unit, a claim made by Mr Browne earlier on Tuesday, with Mr Ó Broin saying he did not believe such a reduction was possible.
Mr Browne said the cost reductions will be made possible by the “significant increase” in the number of units that can be “put on to the one box unit”. The Minister said he would publish data concerning the projected cost reductions “in the near future.”
