Dáil debates
Wednesday, 20 May 2009
Private Notice Questions
Prison Building Programme.
John O'Donoghue (Kerry South, Ceann Comhairle)
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I will call on the Deputies who tabled questions to the Minister for Justice, Equality and Law Reform in the order in which they submitted their questions to my office.
Deputy Charles Flanagan asked the Minister for Justice, Equality and Law Reform his plans for the replacement of Mountjoy Prison and the provision of additional prison places in view of the decision not to proceed with the proposed new prison complex at Thornton Hall, County Dublin.
Deputy Pat Rabbitte asked the Minister for Justice, Equality and Law Reform the circumstances surrounding the collapse of negotiations with the preferred bidder for the Thornton Hall prison project; the costs incurred by the State in regard to the project; his plans for the Thornton Hall site; his further plans to provide additional prison places in view of the recent warnings from an association (details supplied) of the consequences of continued overcrowding in prisons; and if he will make a statement on the matter.
Deputy Dan Neville asked the Minister for Justice, Equality and Law Reform if he will report on the implications of the decision to postpone the construction of the prison at Thornton Hall on the transfer of the Central Mental Hospital to the site; and if the decision to locate the hospital at this site will be revisited in view of the reduction in the value of the grounds of the Central Mental Hospital, Dundrum, County Dublin and the expert views of the Mental Health Commission and others.
Deputy Caoimhghín Ó Caoláin asked the Minister for Justice, Equality and Law Reform his views on whether public private partnerships are a suitable form of delivery for justice and other social projects in view of developments in regard to his plans for a super-prison at Thornton Hall and the €40 million of taxpayers' money that has already been spent; the steps he will take to address the aspects of existing prison stock without further delay and to address the overcrowding which puts the health, safety and lives of prisoners and prison staff at risk; if these steps will include legislative and policy changes to remove more non-violent offenders from the prison system; the position regarding the site; and if he will make a statement on the matter.
Dermot Ahern (Louth, Fianna Fail)
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I propose to take the questions together.
There is no question of not proceeding with a prison development at Thornton Hall. The rationale for replacing the Mountjoy Prison complex has been well set out, fully accepted by the Government and acknowledged in the House, including by the Taoiseach this morning.
Today, more than 1,100 prisoners are being held in cramped conditions in the Mountjoy Prison complex, which the Government is committed to replacing with a prison at Thornton Hall. This initiative was always intended to be a longer-term project and it is for this very reason that we have moved to increase prison accommodation in recent years. In the short term, the issue of increasing bed capacity in our prisons will be addressed by the provision of an additional 400 prison spaces this summer. Excluding these spaces, which have been built and are ready for commissioning, the Department has, since 1997, added close to 1,400 spaces to the prison estate. Our record shows significant investment in the criminal justice system, not least in the prison system.
The money spent to date on the Thornton Hall project is not wasted expenditure. The site will be used for the new prison and in any event, the cost of acquiring it - €29.9 million - was effectively met by the sale of prison lands at Shanganagh, County Dublin. The Thornton Hall site is an excellent location for a major prison development as it is located fewer than ten miles from the city centre, approximately three miles from Dublin Airport and is accessible from the M2. It is large enough to allow the development of a major prison complex with a range of facilities and to establish a cordon sanitaire around the complex to stop drugs and other illicit goods being thrown into the prison, while having sufficient capacity for future expansion.
An additional 8.7 acres have been acquired to provide a dedicated access road to the main prison site. This was done following representations from the local community which reflected concern about the effect of increased traffic generated by the prison development. The cost of the additional land was €1.3 million.
A total of €10.3 million was expended to the end of March 2009 on professional fees and preliminary site works, including surveys, landscaping, security, site preparation and maintenance of the property. As is the case in all major infrastructural projects, comprehensive geological, engineering and archaeological surveys were conducted at the site. The work covered by this expenditure is not wasted as it is required, irrespective of which tenderer is eventually selected to develop the prison complex at Thornton Hall.
Public private partnerships continue to be suitable for certain types of projects, including in the justice area. They allow us to bring forward major long-term infrastructural projects while spreading the financial impact on Exchequer expenditure over a 20 or 25-year period.
On the decision taken by the Irish Prison Service to break off negotiations with the preferred bidder, the Léargas consortium, to design, build, maintain and finance the project, the negotiations with the preferred bidder were lengthy and complex and conducted in good faith. I am disappointed they did not lead to a successful outcome. The banking crisis gave rise to complications and delay. While my Department was aware that the crisis would have an effect on the availability and cost of finance, the question was to what extent this would be the case and whether this effect could be offset by reductions in construction costs. These negotiations came to a head recently.
Léargas was formally asked to submit its final financial offer to the project. Following a detailed evaluation of this offer by the Irish Prison Service and its advisers, the offer was deemed not to be affordable. This was because the figures quoted were significantly higher then the original quotation which resulted in Léargas being chosen as the preferred bidder. Increases in the cost of finance were a significant factor and no significant reduction in construction costs was put forward to offset the increased costs of finance.
As I have stated on many occasions, including in the House, other options are available and we will now pursue these options. While Thornton Hall will proceed, we must find a more affordable solution for the taxpayer who must secure better value, taking into account developments in prices in the construction industry.
I confirm that it is my intention to bring comprehensive new proposals to the Government in a matter of weeks on how we can proceed with building a new, modern, regime-orientated prison complex at Thornton Hall. I am confident my revised plans will meet the twin objective of giving us modern accommodation and best protecting taxpayers' interests. Following consideration by the Government, I will make a public announcement on the matter. While the project will proceed, if we have to suffer a delay to ensure we secure a more affordable and cost effective solution, that will be the only responsible approach to take.
An area of 20 acres was set aside as a potential site for the development of a new Central Mental Hospital. Although adjacent to the prison site, it is not directly linked to the prison development. A decision regarding its future is a matter primarily for the Health Service Executive and Department of Health and Children.
Charles Flanagan (Laois-Offaly, Fine Gael)
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The Minister indicated that the Thornton Hall project was always a long-term project. I put it to him that the phrase "long-term" has a much different meaning now than it had on the previous occasion we addressed this issue. The Minister uses the phrase as if the latest development was not a setback.
Is the Minister prepared to stand over spending in excess of €40 million of taxpayers' money to date on this project? Does he regard a price of €29.9 million for 150 acres as good and reasonable value in the circumstances? Will he provide full and detailed particulars of the costs of the project to date? Will he confirm that legal and specialist consultancy fees amount to in excess of €6 million? Will he provide a full breakdown of moneys expended over and above the €29.9 million figure, which is a matter of record? Will he address specifically the €11 million in additional expenditure on the project?
In the context of moneys, what are the ongoing maintenance costs of the Thornton Hall site? Will we have another fiasco along the lines of the electronic voting machines, with annual costs having to be met? I understand millions of euro have been spent at the site on landscaping and fencing to deny access to people who wish to shoot pheasants. To what ongoing maintenance costs has the Minister signed up?
In terms of the options available to the Minister, will he outline his short-term plans to address the chronic overcrowding in our prisons which has rendered Mountjoy Prison a dangerous and inhumane place?
Dermot Ahern (Louth, Fianna Fail)
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I do not accept the Deputy's suggestion that this is not a long-term project. It was always intended to be a long-term project.
Charles Flanagan (Laois-Offaly, Fine Gael)
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In that case, the latest developments are not a setback.
Dermot Ahern (Louth, Fianna Fail)
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One does not provide potentially 2,200 prison spaces for the next year or two. The project was always intended to be what Mountjoy Prison was when it was built, namely, a prison for the next 100 years. Thornton Hall will be the most modern prison in the world when it is built. The Government will not resile from its plans.
As I stated, the overall costs to date are €41.6 million. Site acquisition costs, which amounted to €29.9 million, were effectively met from the sale of lands at Shanganagh Prison. As the Taoiseach noted this morning, we made effective use of the prison building suite to get rid of prisons which had become obsolete. In the case of Shanganagh Prison, a cohort of prisoners was not available to serve sentences in an open prison designed for juvenile offenders.
Charles Flanagan (Laois-Offaly, Fine Gael)
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Was the Thornton Hall site good value?
Dermot Ahern (Louth, Fianna Fail)
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The optimum prison capacity is for 400 or more prisoners. In the past ten or 12 years, the Irish Prison Service has sought to concentrate resources on larger prisons rather than having prisons spread throughout the country. It was €29.9 million on the site and €1.3 million in additional costs - €31.2 million.
On the value of the site, it is interesting to note that a local auctioneer who was interviewed by RTE radio at the time of the purchase confirmed that he would not have been able to identify a similar site closer to Dublin for less money.
Charles Flanagan (Laois-Offaly, Fine Gael)
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I do not know what he would say today, if he is still around.
Dermot Ahern (Louth, Fianna Fail)
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There has been much discussion in this House, at the Committee of Public Accounts and elsewhere on the purchase of the site. The Irish Prison Service could have gone under the counter and not admitted the purchase price of this site. The prison service could have engaged an auctioneer to work on its behalf and buy the land, without being open and transparent. However, it genuinely felt that being a State agency, it was correct to indicate to those from whom it was being purchased and those in the locality exactly what was intended for the site and not buy it surreptitiously. It deserves credit for that.
On the additional costs, there were professional fees related to archaeological issues and all the necessary surveys. There was an environmental impact assessment, EIA, of the site. As the Taoiseach stated this morning, there were High Court actions. There were two High Court actions from people who objected to the proposal for the site.
The site and preparations surveys cost €2.7 million. Landscaping costs, of which many are making a big issue, came to €0.4 million. Security costs come to €0.5 million. The total spent up to May 2009 is €41.6 million.
It is nonsensical to state that we got nothing for our money. We got 150 acres out in Thornton Hall-----
Charles Flanagan (Laois-Offaly, Fine Gael)
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Agricultural land that is worth a fraction of what it was.
Dermot Ahern (Louth, Fianna Fail)
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-----adjacent to the M2, the M1 and the M3.
Dermot Ahern (Louth, Fianna Fail)
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It is a site that, despite what Deputy Rabbitte stated on radio this morning, is in a rural area, and that is contiguous to Dublin, to the populations and to all of the major routes in and out of Dublin on the north side.
Pat Rabbitte (Dublin South West, Labour)
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Why does the Minister keep referring to trading Shanganagh for €30 million and spending it on a farm that was worth €6 million, as if that makes it all right? How does trading Shanganagh make it all right? On the auctioneers whom he quoted on the radio, there were several of them who stated that it should have been bought for approximately €6 million. The Comptroller and Auditor General stated that it cost more than twice what it ought to have cost.
On telling us that the prison service should have bought it quietly, I should have thought that is exactly what it should have done. Going around stating one has €30 million to spend on a site, what does one expect will happen but one will get a site for €30 million? From the point of view of the vendor, this was the biggest claim jump since the Yukon, and now it has collapsed.
I ask the Minister to tell us why it collapsed. He spoke of bankability. He spoke of the banking crisis and it not being off-set by reductions in building costs. What does he mean by that? He told the House as recently as 22 April that everything was on course. For whom is the banking crisis the issue here? Is it for the preferred bidder?
Why does he presume that if this preferred bidder is to be replaced by another, that the other preferred bidder will not have these bankability problems and will not have the problems of construction costs? The Minister did not explain to the House why a different builder can go ahead.
When the Minister states he has other options am I correct in assuming that he is referring to other options for the construction of a prison on this same site?
John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy's time has expired.
Pat Rabbitte (Dublin South West, Labour)
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The Minister is not factoring in however much he paid for the site adjacent to Mountjoy. Does he have a figure for the site he bought adjacent to Mountjoy? That must have cost a pretty penny as well.
Dermot Ahern (Louth, Fianna Fail)
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The other options refer to other options at Thornton Hall and nowhere else on the building of a prison. The principal conclusion of the Comptroller and Auditor General's report on the purchase of the site was that if we had engaged an agent to acquire the site on our behalf without stating who we were and for what purpose it was intended, we would have acquired the site for a reduced price. At the time the prison service and my Department rejected that view on the grounds that Government agencies had to act in an open and transparent manner. To have proceeded in a covert manner would have left the Minister, the Department and the Government open to allegations that the State had acted illegally by acquiring agriculturally zoned lands at a particular price and then conferring a commercial advantage by means of legislation introduced to facilitate the prison development.
Pat Rabbitte (Dublin South West, Labour)
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Builders do it all the time.
Dermot Ahern (Louth, Fianna Fail)
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We are not builders. We are a sovereign Government. This is a sovereign Oireachtas and we must behave in a transparent manner.
Charles Flanagan (Laois-Offaly, Fine Gael)
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The Minister is not fit to deal in land at these prices.
Dermot Ahern (Louth, Fianna Fail)
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If we went around surreptitiously getting agents to buy land on our behalf, I would hazard a guess - I hear what the Deputies say and that is their modus operandi - that the minute we did that and it was found out that this was for a prison, this House would be in convulsions from people coming in stating that we acted in a sly and underhand way, and were not being open and transparent with the public.
On the issue of the Mountjoy site, that was not purchased by the Department of Justice, Equality and Law Reform or the prison service. It was purchased by the OPW in the context that in moving the entire Mountjoy complex out to Thornton Hall there would be a major redevelopment in the inner city Mountjoy location.
Pat Rabbitte (Dublin South West, Labour)
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How much did it cost us?
Dermot Ahern (Louth, Fianna Fail)
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I heard it was in the region of €23 million. That was purchased by the OPW in the context of a future development of the Mountjoy site for housing, for retail and to make it a centre of excellence in the middle of, originally, what was a reasonably depressed area because of the presence of the prison. That was something to enhance that area. The intention is, as the Taoiseach stated, to continue with that project of enhancing the Mountjoy complex once the prisoners are out in Thornton Hall.
Pat Rabbitte (Dublin South West, Labour)
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Why did the contract break down, which was my main question?
Dermot Ahern (Louth, Fianna Fail)
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I go back to the point made. The preferred bidder was accepted on the basis of a particular price. In the intervening period, particularly in the context of the global financial turmoil and the difficulty in getting finance, it was accepted that the cost of financing this and another project would increase.
On the reason the negotiations collapsed, as I stated many times in this House, I was not privy to the discussions. Obviously, I was informed as to the progress. No more than the Deputies, I was agitating to get this matter brought to finality so that we could get on with building the prison. There was an imperative in that there is overcrowding in our prisons. Despite the 400 places already built and ready for occupation in order to take care of the short-term issue in the next couple of years, I accept there is an imperative.
Even if the State was over a barrel on this matter, we were not going to pay out a blank cheque. It is the case that the annual cost, what is called the annual unitary cost, of this went up by more than 30% since 2007 to date. Although most of that was due to the cost of finance, it was not off-set by a concurrent reduction in construction costs.
John O'Donoghue (Kerry South, Ceann Comhairle)
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The Minister's time has expired.
Dermot Ahern (Louth, Fianna Fail)
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For example, look at the other infrastructural projects being carried out by Government, particularly in the education sector where the Department of Education and Science is re-tendering school projects. There is one in my constituency where the prices have come in 10% to 20% under what was originally indicated two or three years ago.
Given that this project, and the way it was framed in the context of the initial bid increasing by 30%, became unaffordable from the taxpayers' point of view, in effect, we will consider other options. As Deputies must accept, I have always told the House that, while we had a preferred bidder with whom our people were discussing the matter, we would go to the other options were that process to be unsuccessful. In the coming weeks, I will revert to the Government to determine how to proceed. We will consider PPPs and the use of the National Pensions Reserve Fund, NPRF, as the latter could be used for this type of project.
Dan Neville (Limerick West, Fine Gael)
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I thank the Ceann Comhairle for taking my question, but I am deeply disappointed that the Government is not in a position to reply. The Minister stated that he was not responsible and my question to the Government on the Central Mental Hospital at Thornton Hall has been ignored. Where does collective responsibility enter into it? I am surprised that the Minister of State, Deputy Moloney, is not present, since this is an issue for him. The Government has chosen to ignore what the Ceann Comhairle and I agreed was an issue arising from changes in the Thornton Hall project.
In transferring the Central Mental Hospital to a location adjacent to a prison, the Government is ignoring the human rights of people with mental illness. To locate a mental illness therapeutic facility beside a prison stigmatises and discriminates against its patients. Not only was the proposal roundly rejected by the Central Mental Hospital's families, carers and patients, the voluntary organisations, the Mental Health Commission, the hospital's clinical director and the Irish Human Rights Commission, it flies in the face of the core values and principles enshrined in the report on the mental health services, A Vision for Change, the recommendations of which have been accepted by the Government as policy.
Informing the Minister is pointless given the circumstances, but we were informed that a reason for moving the Central Mental Hospital from the lands in Dundrum was their value to the State. In changed circumstances, their value has been reduced considerably. For the reasons that I have outlined, the decision to locate the hospital beside a prison should be revisited.
Dermot Ahern (Louth, Fianna Fail)
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Regarding the last point on the value of the lands, the decrease in Dundrum's land prices has been less than elsewhere. A site in Dundrum will always be a substantial asset. As the Deputy knows, the original intention was to move the Central Mental Hospital to Thornton Hall and to keep it separate from the prison with its own entrance, although still on the overall site. Extra land was purchased for this purpose. The decision-----
Dan Neville (Limerick West, Fine Gael)
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It is the Government's decision.
Dermot Ahern (Louth, Fianna Fail)
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It was agreed in principle. The decision was for the HSE and the Department of Health and Children. While it may need to revert to the Government, the position remains as it was yesterday in that respect.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I note with some relief the Minister's acknowledgement that there is an alternative to PPPs. On the indication of the possible use of the NPRF for major public capital works, my colleagues and I would have argued for this time after time.
Yesterday's announcement regarding Thornton Hall comes hot on the heels of the collapse of regeneration plans for some of Dublin's most marginalised communities. The common denominator between the PPP arrangements for the regeneration of St. Michael's Estate, O'Devaney Gardens, Sean McDermott Street, Dominick Street and Thornton Hall is Mr. Bernard McNamara. Irrespective of the fact that the Minister rejects the charge and despite the proven unreliability of PPPs with this particular developer, which is knowledge that the Government has had for 12 months, it is arguable that the Government has wasted approximately €11 million on site security and preparatory works on top of the original expenditure of some €30 million for a site that, as other Deputies have indicated, was only worth in the order of €6 million at the time.
I am concerned about whether Thornton Hall will ever be used for a prison and I strongly oppose any idea of co-location with a relocated Central Mental Hospital. The latter would be an outrageous proposition with which to proceed. I join with Deputy Neville in using this opportunity to appeal for a complete reappraisal of that proposition.
John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy's time has expired.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Will the Government produce a plan, including a timeframe, for the required works on the existing prison stock to address the questions of upgrades and overcrowding? As the question that I read into the record indicated, what steps will the Minister take to remove more non-violent offenders from the prison system? Does the Minister not agree that doing so would be a more cost effective way of addressing overcrowding? Will he ensure that the Fines Bill 2009, which only passed Second Stage last week after a delay of some seven years, is progressed to the final Stages?
John O'Donoghue (Kerry South, Ceann Comhairle)
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The Fines Bill.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Will the Minister introduce additional legislation or amendments to the Bill to end the practice whereby people are imprisoned simply because they are unable to pay a debt? Recently, there was a high profile case in my constituency in that respect.
John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy has gone well over time.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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It is before the courts for consideration. Will the Minister make arrangements to remove immigrants who are routinely detained for technical or logistical reasons from the prison system, given the fact that they are not being detained in prison circumstances for any crimes and that their presence there is unacceptable? A body of people across all of the areas that I have indicated is inflating prison numbers. The Government should take the key step of ensuring that people should not be inappropriately placed in prison.
Dermot Ahern (Louth, Fianna Fail)
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Regarding the Fines Bill, we will change the law in every way possible to avoid imprisonment as a last resort for the non-payment of fines. No matter what legislation we pass in this respect, though, imprisonment must be the ultimate solution if people ignore fines completely. From my practice as a solicitor of many years, there are many opportunities for people to pay fines. Hurdles must be crossed before anyone is sent to prison. However, I accept-----
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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There must be an alternative.
Dermot Ahern (Louth, Fianna Fail)
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To the best of my recollection, approximately 4,000 people are in prison at any one time, some 0.4% of whom are there for the non-payment of fines. They have refused every exhortation and have probably been obstinate in paying the fines. They are not there because of an inability to pay. Rather, they have adopted a principled position to go to prison instead of paying the fines. We cannot get away from that situation no matter what legislation we pass.
I have outlined the case as regards the purchase. The €10 million over and above the land's purchase would have been spent regardless of which consortium or option we chose. It was necessary to expend that money. It is not dead money. What was done will obviously fit into any subsequent options that are looked at by me. Regarding time scales, I will come back to the Government in a number of weeks and hopefully we will make an announcement.
Our intention would be to have this out for tender sooner rather than later, so that interested parties would have a good period of time over the summer months, when perhaps the building industry is somewhat more dormant than normal, and such parties would have an opportunity to tender. We may then be able to come back to it towards the end of the year.
I do not want to be prescriptive regarding time-scales because this is a major project. There is a difference of hundreds of millions of euro between the original price and that which was finally suggested and we did not accept. We must be given some credit, in that if we had responded and agreed to the type of costs, namely, a 30% increase, people in this House and outside would, rightly, query, particularly in the context of the economic situation generally in this country, why we would go ahead with such a project. We will be looking at all the options in the coming weeks.
Charles Flanagan (Laois-Offaly, Fine Gael)
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Regarding where we go from here, the Minister, Deputy Ahern, speaks of other options. Will he confirm to the House that this massive project is, in effect, dead in the water and the option to be explored now is in line with best international practice? He should go back to the drawing board and bring forward realistic plans for a smaller, scaled-down version of Thornton Hall, to deal with the replacement of Mountjoy. He should forget about the Central Mental Hospital and a super prison that would incorporate up to 4,400 prison spaces, but deal with the replacement of Mountjoy-----
Dermot Ahern (Louth, Fianna Fail)
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How many spaces did the Deputy mention?
Charles Flanagan (Laois-Offaly, Fine Gael)
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The Minister said there would be 2,200 and there would be provision to double those, in the event one needs to, as in Mountjoy-----
Charles Flanagan (Laois-Offaly, Fine Gael)
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-----where people are put on the floor.
Dermot Ahern (Louth, Fianna Fail)
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No, the ultimate figure would be 2,200, doubled up.
Charles Flanagan (Laois-Offaly, Fine Gael)
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I ask the Minister to come back to the House with a scaled-down version that will deal with the replacement of Mountjoy and accept his massive project is dead in the water.
Dermot Ahern (Louth, Fianna Fail)
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I want to clarify the position. Thornton Hall comprised 1,200 rooms to facilitate 1,200 prisoners, but there was a facility, because of the size of the rooms, to, in effect, double up to 2,200, not 4,400. The ultimate capacity of the prison would be 2,200, in the way in which it was designed.
Charles Flanagan (Laois-Offaly, Fine Gael)
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That is too big, in any event.
Dermot Ahern (Louth, Fianna Fail)
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As this is a long-term project, we have time to consider how we proceed. That would be to look again at the overall project, which was a super or large prison comprising 1,200 rooms. It may very well be that we will look, as the Taoiseach indicated this morning on Leaders' Questions, at perhaps phasing it in over time. Ultimately, we will build and finish a prison in the type of large scale envisaged in the original proposal. I do not know who mentioned a cost of €6 million, it was not Deputy Flanagan. I have not heard that before. Even if one got 150 acres of very good agricultural land in the west, I do not think one would buy it for €6 million.
Dan Neville (Limerick West, Fine Gael)
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One could buy it for €3 million.
Dan Neville (Limerick West, Fine Gael)
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It was only €10,000 an acre.
Pat Rabbitte (Dublin South West, Labour)
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The Minister invites me to agree with him that whatever about the preferred bidder, he had other options. He never said anything of the kind. He never communicated to this House that there was any doubt about the preferred bidder. When the same preferred bidder pulled out from housing projects, I asked the Minister repeatedly if he had satisfied himself about its capacity to deliver. All the Minister did was give me lectures about how he would not be seen on the same side of the street as a developer. I do not know what the Minister has against developers, but it was a very odd thing to say.
I want to ask the Minister a question and would be greatly pleased if he would do me the courtesy of listening to it. He has told the House most of the 30% increase in cost is due to the cost of finance. If this bidder had a difficulty with the cost of finance, how does the Minister propose to tell the House that another preferred bidder would not have exactly the same difficulty with the cost of sourcing money?
Did I hear the Minister say that the difference between the original price and the price the preferred bidder was now trying to extract was hundreds of millions of euro? That is what I wrote down, namely, that the difference is hundreds of millions of euro. How much will this project cost us? I would like the Minister to clarify that.
I again put the question to the Minister that has been put by my colleagues. Is it not time to re-think whether the notion of the American-style super prison is what we require? It is especially the case that we need to re-think it if one is talking about the difference between the price in 2007 and now being hundred of millions of euro.
How can the Minister ask this House, having regard to electronic voting, PPARS and the collapse of Thornton Hall, to have confidence in the Government? If this Government was tasked with building a duck pond, the ducks would drown.
Dermot Ahern (Louth, Fianna Fail)
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Regarding the Deputy's assertion that I did not indicate at any stage there were any difficulties with this, as I said many times, I was not privy to, nor did I take part in, any of the negotiations. I was informed by my officials as to how the discussions were going. No more than anyone in this House, I was agitating to ensure this would be built as soon as possible so we could have the available prison spaces.
On 9 October 2008 I said, in response to parliamentary questions asked by Deputies James Reilly and Leo Varadkar, that in the current fiscal situation facing the country it is important that we all strive to reduce costs, live within our budgets and avoid any cost increases, that the bidder must meet all the criteria, including the financial criteria, in the tender and although a preferred tenderer was selected, there were other tenderers and other viable options which could still be considered if for any reason the negotiations referred to were not successfully concluded.
On 29 October, in response to a question asked by Deputy Charles Flanagan, I said there were other tenderers and options which could still be considered. In November, I said the same to Deputy Aengus Ó Snodaigh. I said on numerous occasions that it had to reach certain affordability criteria. There is a long list and I can give it to the Deputy if required.
Regarding the issue of hundreds of millions of euro, this is a major project. We would have been guilty of a dereliction of duty if we were to agree to a proposal where the cost of finance, which it is accepted would be an issue with other bidders, would be a substantial issue regarding the overall cost.
Where there was not a quid pro quo regarding a significant reduction in the construction costs, and when we see in other projects that the reduction in costs of tenders can be 10% or 20% across any building project in which the Government is involved, we believe we should, in effect, cut off the negotiations because this was unaffordable in its current form and we would look again at the other viable options. As I said earlier, it may be that we will consider the possibility of funding this through PPPs or the pension reserve fund.
A number of other ancillary services within the prison might not necessarily be required in the future. For instance, there was provision for a juvenile block for Oberstown House. We can reconsider a number of the details of the original proposal that would ultimately reduce the cost but still get us the net result of having a substantial prison facility on the Thornton Hall site that would deal with the prison population for approximately 15 to 20 years hence.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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The Minister claimed in his response to me that the sum of approximately €11 million that had been expended in the period since the purchase of Thornton Hall was all moneys employed as part of future investment for the project, and that it was not wasted money. Whatever has been expended, if the footprint of what was proposed is not to proceed, surely in terms of site security and whatever other development works, a significant element of it will not have any forward application? It is a sustainable argument that moneys have been expended unnecessarily over the period, if at the end of the day the whole thing goes pear-shaped and the money is wasted. It will join the litany of many other areas of wastage by this Government in the past decade plus.
The Minister made reference to alternative funding mechanisms. I emphasise this is not to in any way commend an approach to Thornton Hall by any alternative means. I record again my opposition to the proposition in principle, both in regard to the so-called super prison and to the transfer of the Central Mental Hospital. The Minister has indicated that there are realistic alternatives to the employment of PPPs in terms of funding public capital works. That is the first time I have heard such talk for some time, if at all previously. I commend that approach for appropriate public capital works in the future. The National Pensions Reserve Fund is just such a mechanism for funding these works into the future.
Will the Minister employ that mechanism to fund the essential major refurbishment works necessary in existing prison facilities, having ensured that the current prison numbers are reduced appropriately in line with earlier arguments. I refer to the detainment of persons for the non-payment of fines, many of whom, despite what the Minister said, are in prison because they cannot afford to make repayments. People are in prison because they are unable or incapable of meeting debt repayments to various financial institutions, a number of whom are clearly from each and every one of our constituencies. I refer also to those I mentioned previously, immigrants who are unnecessarily detained in prison environments due to technical matters relevant to their presence in this jurisdiction. Surely, those are the steps and measures that must be taken? The National Pensions Reserve Fund is a means of funding the necessary works to address the already inadequate prison conditions that are in use today.
Dermot Ahern (Louth, Fianna Fail)
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I wish to scotch the myth of this being a super prison, it is eight separate facilities within an overall site. It was designed in such a way that all of the separate facilities could share services and provide value for money due to the economies of scale involved. That goes back to the point I made earlier, that it is better to have sizeable prisons rather than a plethora of smaller prisons around the country with separate systems and staff. It is preferable to have economies of scale and that was the principle behind the project. It is not like an American super-style prison, it was to be designed and built in the most modern way according to best international practice.
On the use of PPPs, it is still a viable option because under it the State, and therefore the taxpayer, would not have paid a penny until such time as the prison was handed over. The unitary annual costs would not begin until the prison was handed over. That would be a benefit from the point of view of the Exchequer.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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That is short-termist in the long term.
Dermot Ahern (Louth, Fianna Fail)
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No, that was the position under which the project was going to be financed if we had gone with this tender. We will consider other options. In the meantime, thanks to the good judgment of this Government, we have a National Pensions Reserve Fund. Despite the criticism of the sale of Eircom, the first deposit into the fund was €8 billion from that sale. In addition, we passed legislation to dedicate 1% of GNP to the National Pensions Reserve Fund.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I would not be proud of that start.
Dermot Ahern (Louth, Fianna Fail)
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The possibility exists for the use of those funds. That is something we will consider. I have already had discussions with the Minister for Finance about the use of the National Pensions Reserve Fund for the overall building programme. This Government stands on its record, in that since 1997 we have increased the number of prison places by 1,300, in total contrast to what happened previously when no places were added for many years. We are now adding another 400 places before the end of the year.
Pat Rabbitte (Dublin South West, Labour)
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I wish to get the Minister to focus once again on the figures. If the difference is hundreds of millions, and the difference is 30%, then the full cost of the project must be more than three times hundreds of millions. I do not think the public or the taxpayer has ever heard that figure before today. It seems to me to be the best argument for rethinking the entire project. I put it to the Minister again, now that the collapse has taken place, is it not an opportunity to go back to the drawing board? If the Minister has 400 places coming on-stream then there is a breathing space for us to work this out. It is unthinkable that we should have to pay the kind of money that is now being talked about to fund this project. Regardless of whatever happens to the site in the future, the Prison Service acquired it. The Minister's Green Party colleagues in Government opposed the purchase bitterly at the time. Perhaps they would have some use for it but for us to pile hundreds of millions on top of it-----
Pat Rabbitte (Dublin South West, Labour)
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There used to be allotments in north Dublin. It could be useful for that. The Minister should give the House some idea of the scale of millions about which we are talking. I ask him for the third and last time, why he presumes that if one developer has had this difficulty in sourcing money at an affordable cost, that changing horses to a different developer would allow for the sourcing of money at a significantly cheaper cost.
Dermot Ahern (Louth, Fianna Fail)
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Because we would expect that, given the prevailing economic circumstances and market conditions, that other bidders would be able to give a better reduction on the construction costs. That was not the case in respect of this particular tenderer and that is why ultimately it was not affordable.
On the hundreds of millions and the 30% increase, one cannot build a prison with eight facilities to the highest international standards, do justice to all the issues of maintaining the human rights and dignity of prisoners and make sure they have the appropriate conditions without spending a huge amount of money. That is why I have said on many occasions that this is and was always a long-term project. It is not something that will take care of the prison system requirements for the next two to three years, which is why in the interim we have been extending Wheatfield, Portlaoise and Castlerea prisons. They are the three locations where the 400 prison places have been made available and will come on-stream in the coming months. We were not taking everything for granted and waiting for Thornton Hall to come on-stream in the next year or two, even in 2005 when it was originally purchased. We should be given credit for not only dealing with the short term, but also for the long term and for future generations. Since Mountjoy was built, no Government has thought about this in the long term. We should be given credit for that.
Pat Rabbitte (Dublin South West, Labour)
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Did I not hear the former Minister this morning, Michael McDowell, saying that it would be ready in 2010? Did the Minister not hear the piece played before he did the interview?