Phil Hogan (Carlow-Kilkenny, Fine Gael)

I welcome the Labour Party motion relating to the five regeneration projects that have been the subject of considerable difficulty, particularly for the residents and the people who look forward to getting their new homes in time arising from these proposals which were brought forward by Dublin City Council through the PPP process.

Dublin City Council identified the PPP process as the best method of delivering the regeneration project. I do not think any of the residents would care how it was delivered as long as it was delivered. Nobody cares at the end of the day whether it is public or private expenditure as long as the job is done. The council selected the property developer, Bernard McNamara, to redevelop all the various proposals. It is somewhat surprising that one would put all one's eggs in one basket. Perhaps the first lesson that can be learned from this process is that, regardless of the climate, it is rather difficult to expect one developer to deliver on time and on budget on all such major developments to the tune of €900 million.

Under the original plan, the developer was to build approximately 1,800 new homes between the five sites. It was an attractive deal to the council as the property developer had proven expertise in planning, design and construction. In return for undertaking the design and construction, the developer was to retain approximately 800 units and sell them on the open market. That was when the jam was supposed to arrive. Unfortunately, however, for the purposes of the regeneration projects, all the consultation that had taken place, the goodwill the residents had given this project and the fair wind it was getting in respect of approvals, it did not turn out that way. As Deputies Costello and Upton rightly pointed out, when the breeze arrived on the open market climate, the people depending on the social and affordable aspect of the housing were the first to suffer.

There is no doubt that the developer decided to pull out because he could not sell the private end of the site as quickly as possible for the amount of money he anticipated he would get. It is very disconcerting that this would happen, particularly for the people whose hopes of having a new community and new homes, a win-win situation for all concerned, were built up.

There is no doubt that the major contraction of the housing market in the past 18 months is the reason for the derailing of the PPP project, but I would not throw out the PPP project completely because of that. Even though the motion states that its proposers have difficulty with the PPP project, I understand that it is for this particular project and these five regeneration areas rather than anything else. I have been in contact with Dublin City Council about this. Seven-day letters have been issued in respect of two sites involving Mr. McNamara and mediation is taking place in respect of two others. Mr. McNamara is proposing to go ahead with one site, but we do not know whether that will happen. He has received sufficient time from Dublin City Council to come up with alternative proposals but it does not seem that he will do so.

It will be interesting to see whether Dublin City Council pursues the contractual obligation laid down through that process to see whether it can get some of the money back. I suspect that there will be some quid pro quo in the context of mediation to get the job up and running as quickly as possible. If one was to again go through all the various processes through which this particular deal has gone, it would be another year before we would get anything up and running with a new developer.

What Dublin City Council is trying to do is the right way to go. It should get the developer in, see what can be salvaged at this stage, seek mediation and other projects and go to the underbidder to see what can be done in respect of pricing. That is the best way we can salvage things. I hope that the Minister will be proactive in ensuring that the quickest possible deals are turned around in respect of the regeneration of these areas. At the end of the day, people want a result rather than commitments, promises and new processes that will take an indeterminate amount of time. They certainly do not want to end up in the High Court which, as we know, is an expensive and very time-consuming process. Waiting two or three years down the line for some site to be regenerated is not exactly what anybody here wants. I hope that goodwill will be evident in how the process will pan out at the end of the day.

The council hopes to salvage parts of the deal and is still working with the property developer to that end. The clauses in the Labour Party motion reflect the frustrated comments of the local groups. These relate to what were the reasoning and wisdom behind giving the contract for five large projects, which would affect thousands of residents if things went wrong, as they have, to a single property developer. In addition, why did the contracts not contain stronger penalty clauses which would concentrate the mind of any developer?

It is interesting that the developer did not decide to sell the Burlington Hotel. Did nothing go wrong with this? A similar situation pertained to the Allianz building at the rear of the Burlington Hotel, probably because of its preferential location. He would have had to concentrate his mind on some of those assets if more punitive clauses had been included to ensure that he could not walk away in the manner in which he has done.

The local residents have a point in respect of all these matters, which have brought about the motion before the House tonight. The motion calls for whatever steps that are necessary to be taken to ensure that Mr. McNamara is removed from the process. I think we would be better off getting something out of it if we can, salvaging something even with Mr. McNamara at this stage, going to the underbidders as quickly as possible and getting a deal as quickly as possible

I would say to the Minister of State that social and affordable housing is not working as satisfactorily as it was. The Part V process is not working because Dublin City Council and other local authorities do not have the money to buy out their contractual obligations from the developers on many of these sites. In respect of the 20% allocation, one might as well have 5% or 50% at this stage because there is no money. The Department has capped the amount of money a local authority can spend on any contractual obligations. All local authorities are telling public representatives that they do not have enough money to fulfil existing contracts on the basis of the money they have been allocated in 2008. Many contracts on water, sewerage and housing will not go ahead this year. Contracts are fine, it works both ways and there must be goodwill on all sides, but, equally, the money must be there to achieve the objective.

What we want to see as a result of this Labour Party motion is that truth is established about where we can go from here. We want to see an opportunity for people to be certain that a route to a successful conclusion exists and that the five regeneration projects will go ahead rather than have just another opportunity to say "if this" and "if that" in a conditional sense about the potential of the future. People want to know if these projects are dead or alive and where they go from here. I hope that the Minister and his Department will be very proactive in ensuring that the people who have been painstakingly involved in the five regeneration projects are given that truth and certainty regardless of how unpalatable that might be in some cases in order to map out the route ahead to bring these to a successful conclusion as quickly as possible.

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