Patrick O'Donovan (Limerick County, Fine Gael) | Oireachtas source

The rent being paid by the OPW in respect of the offices at block 1, Miesian Plaza is in accordance with the terms of the lease as set out. However, the OPW has acknowledged that an error occurred and that it should have engaged with the landlord and sought to recalibrate the rental rate as a result of the new measurement standard, international property management standard 3, IPMS 3, introduced in early 2016. The error should not have happened and from my discussions with the Commissioners of the OPW, I know they very much regret that it did. I reiterate that regret this evening on behalf of the OPW.

The annual rent associated with the additional area under IPMS 3 is €279,827 plus VAT. The impact to date is in the region of €1.2 million plus VAT and, if the situation continues unabated, the impact over the 25 years of the lease could amount to between €7.7 million and €8.6 million plus VAT, depending on the rate of inflation. The OPW processes have been reviewed and strengthened to ensure such a situation does not arise again. Approval arrangements now include an independent verification of heads of terms agreed on leasehold or freehold acquisitions to ensure alignment between those heads of terms and the final legal documentation.

Since the issue was identified, the commissioners have continued to engage with the landlord on the measurement standard applied. A number of meetings and discussions have already taken place and the landlord has again recently confirmed that he wishes to constructively engage with the OPW on the measurement issue, with a view to reaching a solution that is acceptable to both parties. The OPW and the landlord agree that the best way to progress the discussions is through further face-to-face meetings, which will be arranged once it is permissible under Covid-19 restrictions and it is safe for all to attend.

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