Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I would now like to address a number of issues in the pyrite report which have generated some debate. The first is the number of suspected developments and dwellings and another is the categorisation of dwellings to prioritise remediation works. The pyrite panel undertook a desktop study, in conjunction with stakeholder consultation, to establish facts in respect of the potential exposure to pyrite problems. The information was gathered from a number of sources, including local authorities, structural guarantee providers, representatives of home owners, private builders, construction professionals and public representatives, and was cross-referenced to verify, as far as practicable, its validity.

Estimates of dwellings that may be affected by pyrite are significantly less than the figures which have been speculated about in the public domain. No substantive basis of which I am aware has been put forward for the figures quoted by various sources of 60,000 or 70,000 dwellings, whereas the estimate arrived at by the pyrite panel of 74 estates with 12,250 ground floor dwellings is supported by a robust methodology which is set out clearly in the report. Those figures represent the position as of March 2012 and, based on the methodology used by the panel to arrive at the figures and taking account of the rate of presentation to date in Ireland, I would have confidence that these figures represent a reasonably accurate picture of potential future exposure.

In 23 of the estates included in the above figures, there are no claims with guarantee companies nor is there any evidence that any dwellings in those estates have been remediated, so there may be some overestimation in the figures. The panel suggested that, based on the number of claims with guarantee providers, approximately 850 dwellings as of March 2012 were in need of immediate remediation. The use of this figure has given rise to some concern among people whose homes are affected by pyrite. People are concerned that if they are not included in the figure, they may not be included in whatever remediation processes are finally agreed. I want to make it clear that the figure of 850 dwellings categorised as "red" is an indicative figure and will not be used to determine admissibility to a remediation process. The panel used the information it had collected to give an estimate of the possible distribution of ground floor dwellings across the three classifications of red, amber and green. However, it should be noted that the inclusion of a dwelling in the figure of 850 does not necessarily mean that the dwelling has been confirmed as having reactive pyrite in the hardcore and-or has pyritic heave.

In the preparation of its report, the panel consulted widely, meeting in excess of 40 groups from a broad range of backgrounds: home owners, industry, academia, professional bodies, banks, insurance providers, local authorities and other individuals and public representatives who had a particular interest in and expertise in dealing with pyrite. It also received a number of submissions from various groups and I understand it has considered these. While not everyone may agree with all of the recommendations in the report, it is well researched and the recommendations are supported by a broadly based consultation process. I thank the members of the pyrite panel for providing me with a thorough and comprehensive analysis.

Not all dwellings in estates where pyrite has been identified will manifest pyritic heave and significant damage and the reasons for this are outlined in the report. Recognising this position, the panel recommends a categorisation of dwellings to determine appropriate remediation approaches and these are detailed in the report. I agree with the recommendation that it would be unreasonable to expect dwellings not exhibiting damage to be remediated simply because there is pyrite in the hardcore, and this position is supported in the High Court judgment of Mr. Justice Charleton in the case of James Elliot Construction v. Irish Asphalt. In the judgment, Mr. Justice Charleton stated:

It is not yet reasonable to remove the infill ... solely because of the high sulfur content of the infill. That only established a possible danger into the future. Removing the infill because of actual heave is on the other hand entirely reasonable.

The pyrite report details the basis for arriving at the decision. The approach suggested by the panel to classify the dwellings into red, amber and green is a practical and sensible one to prioritise the remediation of affected dwellings.

The remediation of dwellings is an expensive and disruptive process. I agree with the view expressed by the panel that it would be unreasonable to remediate dwellings if they do not exhibit pyrite-related damage. However, the recommendation is made on the basis of a system being in place to repair such dwellings if and when they exhibit damage in the future.

A number of recommendations in the pyrite report point to the need for constructive engagement by stakeholders in providing solutions for home owners. Following receipt of the pyrite report in late June, I met representatives of the Construction Industry Federation, the Irish Concrete Federation, HomeBond, the Irish Banking Federation and the Irish Insurance Federation. I outlined to them the key role I believe they can and should play in providing a solution to the pyrite problem. The panel expressed its disappointment at the lack of engagement by stakeholders with home owners in trying to resolve the problem, and I concur with that view. I set a deadline of the end of September for the stakeholders to return to me with credible proposals.

All the stakeholders came back to me by the deadline with their individual responses. While they have outlined in varying levels of detail how they see the pyrite problem being resolved, and in some cases how they might participate in a resolution process, they have not come back with definitive proposals that individually or collectively would see stakeholders provide a voluntary solution for home owners. My initial response is one of disappointment that the stakeholders have not responded more positively in this regard. However, they have provided detailed responses and some have offered to participate actively and engage in any structure that might now be established to make progress. There have been further communications in recent days from some of the stakeholders and I am evaluating these to see if they can provide a basis to make progress more quickly.

In addition to recommending engagement by various stakeholders, the pyrite report also recommended the establishment of a resolution board which could be funded by a levy on the construction and quarrying sectors and the related insurance sector. As I have previously stated, my preferred approach to deal with the pyrite problem was for the stakeholders to work with me in finding solutions for affected home owners. This included sourcing the necessary funding to meet the costs of remediation works. In the absence of credible proposals from the stakeholders, I have made it abundantly clear that I would impose a solution along the lines recommended in the pyrite report in regard to the establishment of a resolution board funded by a mandatory levy on industry.

I want to be absolutely clear on this. I have asked my Department to finalise arrangements and terms of reference quickly to permit the establishment of the proposed resolution board next week and to provide the relevant stakeholders with these details. My preference is that all of the main stakeholders would engage with the proposed board. This will give a final opportunity for all those directly or indirectly accountable for what has happened to respond, play a lead role in the remediation programme and contribute to the cost of resolution. I am hopeful that all of the stakeholders will respond positively within ten days. However, if this is not the case, I will have no option but to ask the Government to sanction the necessary steps to impose the type of levy envisaged by the panel in its report and, in that way, to provide finance for the resolution of the problem on behalf of home owners.

The cost of remediating pyrite-damaged dwellings must fall to those stakeholders who are deemed to be responsible for the pyrite problem and who are so identified in the pyrite report. I will do what is necessary to ensure that effective solutions are provided for affected home owners.

I am conscious of the long period for which many affected home owners have been waiting to secure a resolution to this problem and I will not delay in finalising robust proposals to bring this phase of the process to a speedy conclusion. Nobody should be in any doubt about the side of this debate I am supporting. It is the home owners who have suffered for far too long because of this problem.

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