Mr. Sean O'Connor:

The in-depth model was mostly carried out for us by PwC. It was supplied to the Department of Housing, Local Government and Heritage and the Housing Agency at the time. It was tested and agreed to be cheaper than the cheapest debt funding solution. It is partly to do with how the money is paid back. The pension fund, for example, requires a 5% yield of coupon payment. It will put in 5% of the capital and expect 5% back per year, plus an index to keep pace with inflation. With the pension fund we spoke with, we pushed very strongly at the time for our payment and availability agreements to be linked to market rent. The pension investment manager hated that. They felt Ireland was too spiky, with ups and downs. It wants steady, not stellar returns. It is matching the coupon payment with pension liabilities. There were three pension funds, two were Irish and one was non-Irish. They were all highly ethical. They all had the same objective, which is that it had to remain as social housing in perpetuity. We modelled it out on a construction scheme, on a Part V turnkey project and a design and build project. On every project it was several million euro cheaper over a 25-year term. I have no question in my mind that it is cheaper. I am not sure what the issue was. I think leasing was getting a bad reputation, and it was tarnished with that, even though it is leasing to own. The State would own it at the end. It is a very interesting concept. It has been done elsewhere. A key thing about it being cheaper is that when you borrow money you are having to pay capital and interest back. There is no interest in this. It is a straightforward yield payment with an index link to European inflation. It just works out cheaper. Providing the yield requirement is not daft, it can work out cheaper.