Mr. Cormac O'Rourke:

Ba mhaith liom buíochas a ghabháil leis an gcoiste as cuireadh a thabhairt dom tráthnóna inniu. I am honoured to have been nominated as chair of the LDA by the Minister for Housing, Planning and Local Government, Deputy Darragh O'Brien. I thank the Chairman and committee members for their time this afternoon. As requested, I will make a short initial presentation outlining my background and the LDA's future plans. I am joined today by the LDA's chief executive, Mr. John Coleman. We will be happy to answer the committee's questions to the best of our ability.

I grew up in Dublin and was educated in Scoil Lorcáin and Coláiste Eoin. Is gaelscoileanna iad an dá cheann. Más mian le baill an choiste ceisteanna a chur orm as Gaeilge, déanfaidh mé mo dhícheall iad a fhreagairt as Gaeilge. Both of my parents were civil servants. I studied engineering and business in UCD, graduating with a BE in 1980 and a master’s degree in industrial engineering and business in 1985. I joined the ESB from college and worked for five years as a steam and gas turbine engineer. I received training in Switzerland and the UK. I then ran a section that performed economic analysis, efficiency and repair–replace studies on ESB power stations.

In late 1987, I moved to KBC Bank NV's Irish subsidiary. I worked initially in corporate banking and international aircraft finance. In the early 1990s, I was appointed head of KBC's project finance operations in Europe, the Middle East and Africa, with teams in Dublin and Brussels. The team specialised in lending for infrastructure, energy and telecommunications.

In 2000, I returned to ESB International as investment director and worked on major electricity projects in Northern Ireland, Spain and Poland, where the ESB was the investor. I am fortunate to have worked for a major semi-State company that has a highly sophisticated approach to developing infrastructure projects, both in Ireland and abroad, on behalf of its shareholder, the Irish Government.

In 2003, I moved to Goodbody Corporate Finance. Since then, I have spent the majority of my time advising semi-State companies in the infrastructure and energy sectors. I have also been involved in raising finance for those clients, for example, a 30-year bond for Dublin Port to fund its long-term development plans. This is one of the few examples in the public domain. I have also provided advice to several approved housing bodies and other interested parties on social housing.

I had the privilege of being chair of Transport Infrastructure Ireland, TII, and its precursor organisations for nine years. My term in that role finished in November last year.

TII has been a success because it has a very strong and capable management team and impressive work ethic. Above all, it has an extremely strong commitment to public service. I hope that some of TII's approach can be of benefit to the LDA over the coming years. In particular, I regard TII's very strong partnerships with the local authorities as a model to be followed. I am encouraged by the relationships that have developed between the LDA and local authorities to date. The LDA needs to work in close association and partnership with local authorities on larger sites that can yield significant numbers of social, affordable and cost-rental homes in the coming years. The Land Development Agency Act supports this relationship building by seeing the LDA as a service provider to local authorities.

As the committee is aware, it has long been the practice of chairs of semi-State bodies not to comment on Government policy. The committee will understand that I am constrained accordingly in what I can say where this might impinge on Government policy.

The LDA will take a central role in creating large-scale public housing — both cost-rental and affordable-purchase — for qualifying families and individuals. This is clearly laid out in the Act and in the Government's Housing for All strategy. The LDA's working assumption is that cost-rental accommodation will account for approximately 75% of homes built, but this is subject to future discussions with both local authorities and the Government on the housing needs in different areas.

The main focus for the LDA in the coming year will be on delivery. Construction will start on two key sites, Shanganagh, County Dublin, and St. Kevin's, Cork, but it will take some time to be complete. As these and other projects continue, the LDA is progressing with Project Tosaigh, an initiative to activate land with planning permission that is not currently going to construction or is not being delivered quickly enough. The proposal is to accelerate the provision of public housing, both cost rental and affordable purchase, on this private land. The LDA has had strong expressions of interest from the industry with respect to a significant number of affordable houses right across the country. As initial proposals in this project are currently being assessed, it would not be appropriate to comment further on it. Overall, our ambition is to deliver 5,000 affordable homes through Project Tosaigh over the next four years.

Our medium-term plans are to develop ten State-owned sites, which are listed in appendix 1 of our written submission. These sites should deliver approximately 5,200 homes, subject to planning permission and Government approval. The expected mix of housing to be delivered on these sites is approximately 80% apartments and 20% housing.

The LDA and Housing For All have also identified a number of sites that will follow those initial sites, which are also listed.

One of the key roles of the LDA is to act as an active land manager, assembling large-scale strategic areas that can be serviced and delivered coherently over the longer term. This was identified some years ago by the National Economic and Social Council, NESC. This approach has been adopted successfully in a number of other European countries, particularly in Scandinavia. Again, I have listed in my submitted statement the proposed sites for strategic area treatment.

The LDA approach to this activity is to get the agreement of landowners, be they State bodies or private sector, to create master plans for public housing and community services. The agency recently published a master plan for the Colbert Station area of Limerick, for example, and intends to do the same for other areas, including lands earmarked for transfer to the agency in the Government’s Housing For All strategy.

The LDA is currently engaging with the Government on some of the policy drivers of affordability, which include land purchase, taxation and levies. The items that are within the agency’s control include construction margins, financing costs and other fees, which we are also seeking to address. As the committee will be aware, construction costs account for roughly 50% of the total cost of a house or apartment. This in turn is split roughly half and half between labour and materials. A McKinsey study, published in 2017, made clear that construction productivity in the OECD had only increased by 1% a year over the previous 20 years. This is out of line with other sectors of the economy. I believe that the issue of poor productivity in the construction of housing arises from the fact that builders continue to execute a traditional site-based approach. In the medium term the LDA will look to encourage standardisation and modular construction. This should speed up construction, improve quality, provide better working conditions for workers, and generate houses that are more sustainable at lower cost. Construction cost inflation has been a very real phenomenon in recent years. The State, including the LDA, will need strategies to mitigate these risks over time.

It is a matter for the Oireachtas to determine how planning is organised and regulated. From my work at Transport Infrastructure Ireland, TII, I am only too aware of the long delays that public infrastructure has suffered in the planning system for many years. Delays to the granting of planning, whether due to system delays or on foot of judicial review, are not without cost. For example, these delays can deny housing to those who sorely need it. I welcome the Government’s review of planning legislation that is being carried out by the Attorney General.

The LDA legislation has recently partially commenced. The LDA defined activity company, DAC, has been set up. Transferring the work of the agency to the new legal entity is under way. I have commenced discussions with the Department about using the Public Appointments Service to seek additional directors for the agency.

Go raibh maith agaibh as an gcuireadh seo a thabhairt dúinn. Déanfaidh mé féin agus an t-ardfheidhmeannach ár ndícheall bhur gceisteanna a fhreagairt chomh cuimsitheach agus is féidir linn.