Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am delighted to have this opportunity to introduce the Pyrite Resolution Bill 2013 to the House. It represents an important milestone in the quest to provide sustainable and practical solutions for home owners affected by pyritic damage, many of whom have had to endure the hardship of living in pyrite-damaged homes for some considerable time.

Developing the structures necessary to deliver a remediation scheme has proved particularly challenging and, regrettably, has taken much longer than I anticipated. Initially, I had hoped that those identified in the report of the pyrite panel, which was published in July 2012, as having direct or indirect responsibility for the pyrite problem would work with me to provide a voluntary industry-led solution, including appropriate funding arrangements. Despite protracted discussions, however, it did not prove possible to agree a voluntary scheme.

In the absence of such agreement, the Government approved the funding of a pyrite remediation scheme from the imposition of mandatory levies on the quarrying and insurance sectors, on which basis my Department commenced work on the development of a pyrite remediation Bill. Unfortunately, legal difficulties arose during the drafting process and it was not possible to proceed on the basis of the Government approval.

While the State is not responsible for the pyrite problem, a view supported by the independent pyrite panel, it would be unconscionable to leave affected home owners without a solution. Against this background and having regard to the exceptional nature of the pyrite problem and the circumstances in which it occurred, I asked my Department to explore alternative options for resolution. Despite a number of alternative options having been considered, the only sustainable and practical option was to provide Exchequer funding.

In spite of budgetary constraints, the Government recently approved initial funding of €10 million, with additional funding to be provided from a stimulus package to be agreed early in 2014. This will enable the homes identified as being most severely damaged to be remediated over a two-year period.

The main provisions of the Bill provide for the establishment of the pyrite resolution board on a statutory basis and the operation of the pyrite remediation scheme. Earlier this year, I set up the board on an administrative basis. The report of the independent pyrite panel provides the backdrop to the Bill. One of its key recommendations was the categorisation of dwellings as red, amber and green as a means of prioritising the remediation of affected dwellings. The Bill follows this approach. The Bill provides for a pyrite remediation scheme for dwellings affected by significant pyritic damage, having regard to the Irish Standard 398-1:2013 Reactive pyrite in sub-floor hardcore material - Part 1: Testing and categorisation protocol. This standard was developed and published by the National Standards Authority of Ireland, NSAI, in response to a recommendation in the pyrite report. This approach is practical and sensible. The remediation of dwellings is an expensive and disruptive process and it would be unreasonable to expect dwellings not exhibiting damage to be remediated. This approach is also supported in the High Court judgment of Mr. Justice Peter Charleton in the case of James Elliot Construction v. Irish Asphalt, which is now on appeal to the Supreme Court. 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 scheme will apply to dwellings within the geographical areas identified in the pyrite report and where the home owners can establish to the satisfaction of the pyrite resolution board that they have no other practicable options to obtain redress other than under the scheme. However, it is not intended that the financial resources of individual applicants will be considered as part of the assessment of available options, although a number of other pertinent factors will be considered, including the extent of structural warranty cover or other forms of insurance cover available to the home owners or legal actions being pursued by or on behalf of the applicants.

This is not a compensation scheme. Home owners will not be able to seek the recoupment of costs associated with the remediation of a dwelling undertaken prior to the commencement of the scheme. Inclusion in the scheme is predicated, inter alia, on the dwelling being subject to significant damage attributable to pyritic heave and where this can be verified, having regard to the IS 398:1-2013 prior to works commencing. This is in line with how similar Government schemes operate or have operated in the past, where prior approval is a key eligibility requirement for a scheme. The Bill provides in exceptional circumstances that a dwelling that does not meet the eligibility criteria of the scheme in terms of either the severity of damage or on the grounds of ownership may be included in the scheme if it adjoins another dwelling being remediated and where the board considers that its exclusion may cause damage to either dwelling.

While the board will not directly employ staff, it will be supported by staff who will be assigned to it mainly from my Department, but also from the Housing Agency. This will enable the board to undertake its role efficiently and without the necessity for a separate and costly staffing structure. The Housing Agency will be responsible, inter alia, for the procurement of competent professionals and contractors, arranging for testing of dwellings, awarding contracts and making payments in respect of the remediation works and all other ancillary costs.

My preferred approach for dealing with the pyrite problem was for responsible parties to provide a voluntary solution. While this did not prove possible, the pyrite resolution board is continuing to engage with HomeBond with a view to agreeing a process within which the latter can contribute resources to the remediation process. I want to make it clear that any such agreement will be fully transparent.

The scheme provides for a two-tiered appeals process. Decisions made by staff of the board can be appealed to the board itself and decisions made by the board can be made to an independent appeals officer appointed by the Minister.

The initial phase of the remediation programme will deal with approximately 1,000 affected dwellings that it is understood are in need of repair. My Department and the pyrite resolution board are confident that this figure is credible and its validity is supported by a number of positive indicators, including the number of people who have registered an interest on the pyrite resolution board's website to receive an application when the scheme becomes operable, that being, some 850.

The board will be responsible for overseeing and directing the delivery of the pyrite remediation scheme and has already made significant progress on developing appropriate systems and procedures. It is finalising work on the proposed online application and processing system and is also working on developing other complementary systems, with appropriate checks arid balances, to ensure that effective and efficient programmes of remediation are delivered to affected home owners. Following the Bill's enactment, the board will prepare a draft scheme that will be submitted to me for my approval. When approved and made, it will be laid before the Houses of the Oireachtas. I understand that the board will be in a position to accept applications early in the new year.

I will table amendments on Committee Stage tomorrow evening, most of which will be of a minor drafting nature or for the purposes of clarity. However, one amendment will provide for the board to seek to recover damages or costs from any person who is deemed responsible for pyritic damage to the dwelling of the applicant who has consented to the board instituting civil proceedings.

I had hoped that the pyrite remediation process would be more advanced by now in terms of works having commenced, but the legal difficulties that arose with the drafting of the previous legislation has inevitably impacted on the anticipated timeline. The Bill provides a clearly defined legal framework for the delivery of practical and sustainable solutions to home owners within a reasonable timeframe. The scheme is fair and transparent and will restore the structural integrity of pyrite-damaged homes at minimum cost to the taxpayer and I hope that Senators on all sides will welcome this important piece of legislation. I commend the Bill to the House.

Darragh O'Brien (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister and this Bill. I know how much work he and his officials have done on the pyrite issue. From time to time, I have criticised the Government on various issues, but I must commend the Minister's commitment in this instance. It is also appropriate that I mention our late colleague, the former Minister of State, Shane McEntee, who is unfortunately no longer with us. His area and mine were badly affected. From speaking with him, I know that he did a lot of work on the issue. On the day that this Bill is introduced, it is important that the former Minister of State and Deputy, Shane McEntee, be mentioned and that his work be acknowledged.

The Bill is a major step forward. I will comment on it and, like the Minister, I will table some amendments tomorrow. I have visited more than 100 homes in the north Dublin area that are badly affected by pyrite. It is a scourge on those families and home owners, many of whom have paid substantial sums for houses that are now worthless. At least this is a light at the end of the tunnel and a roadmap forward. I hope that the Minister will consider the amendments that I will table on behalf of my group in the good faith that they will be meant.

I have a few concerns that I wish to put to the Minister. Early last year, I published the Home Remediation Bill on pyrite. I am concerned that we have understated the problem and I note that the Minister mentioned that in his speech. I would hope that he will keep the situation under active review and I take it that he has commissioned a number of independent reports. In the town of Lusk alone, we are talking about remediating nearly 850 houses and, in the first round, 1,000 have been badly damaged.

While the Minister has the red, amber and green approach to remediating those houses that display a severe level of pyrite, the problem is progressive in the sense that the situation gets worse the longer it remains untreated. The Minister has rolled out this scheme on the basis of starting in 2014 with a fund of €10 million but is there a multi-annual fund? Is it €10 million each year for three years or does the Minister have to revert to Cabinet to seek additional funding?

I agree with the Minister it is regrettable that some of those who were responsible for this problem, and some of the insurers as well - I will not mention the one in particular, but the Minister knows of it - have effectively washed their hands of this matter. That is why I welcome the Minister's opening statement that the State will seek redress from them. There are cases before the courts that will show us what we need to do after that.

Taking the category 2 damages as being the worst affected, where does the Minister see that moving towards? Must people who have over 1% of pyrite in their houses or apartments, reapply to the board as their accommodation gets worse? Some people who live in pyrite estates are worried and have major issues with insurance companies. They include even those who have borrowed money to fix their houses. I have received numerous e-mails from constituents who sought feedback in advance of this debate. They may have fixed their houses already but cannot get insurance on their homes.

These insurance companies need to be brought back in by the Minister through the pyrite resolution board because these houses have been recertified as sound. In such instances, there is still a big cloud hanging over those estates and dwellings because they cannot get further insurance cover.

The Minister should also consider those who have already paid to fix their dwellings. Most of them have borrowed the money, but there is no element of retrospection in the proposed legislation, which is unfair. I ask the Minister to re-examine that matter. Some people have paid up to €6,000 for a pyrite test, which must go to the UK to be verified. They have also borrowed and remortgaged to fix their dwellings but have no recourse through the scheme. The State should allow such expenses to be written off against future tax liabilities, be they PAYE, self-employed or proprietary directors. The Minister could also examine VAT rebates in such cases at the very least. The Minister should re-examine the issue because some people have become further indebted due to this situation.

The Minister said he has excluded commercial and community facilities but community facilities in Dublin and the north east have been affected by pyrite, so there is a major problem there. I have been contacted by one Irish company that paid €10 million for its premises in 2005 but it is now worthless. The insurance company will not pay and the business concerned does not have the money to remediate the premises. That company employs 70 people, so these are real situations.

The Minister said that he will allow people to apply within the scheme and there may be exceptions, but he has specifically mentioned the commercial sector. There is a valid reason for that but here is a company where 70 jobs are threatened. I will forward the details to the Minister and his officials.

I would be interested to hear how the Minister sees the scheme moving forward. He has stepped into the breach and I personally think he has done a good job in bringing it this far. There have been some delays but, unfortunately, people cannot wait. It would have been preferable to make the insurance companies pay. Some houses and apartments are dangerous due to underground services, including gas and electricity, where floors are rising and doors cannot be opened or closed. These are serious safety problems.

Most individuals who have pyrite in their houses are experts, as they have researched the matter. They know the situation will get worse. Those on the red card can apply to get it done immediately but the Minister should give a commitment to those coming down the tracks in the next year or two as their houses deteriorate. The Minister should reconsider the houses he has not classified but which require immediate work. It will be more expensive to fix them when they deteriorate, including such problems as cracked tiles and dislocated cabinets.

I have tabled a number of amendments for Committee Stage tomorrow to deal with these items in more detail. I have discussed the issue with the Minister personally and I am trying to be helpful with regard to this Bill. We will be supporting this legislation. Tomorrow, however, I wish to discuss specific amendments dealing with retrospection and a review. It is important that the Oireachtas should review the scheme regularly.

When the Minister publishes his guidelines on how the scheme will operate, I note he will lay them before the Oireachtas. Can he give a commitment to set some time aside to examine the criteria for applying under the scheme? Regardless of party affiliations, we can see how people have had to live with the scourge of pyrite in recent years. It affects family life, including finances and insurance, and is all encompassing. The Bill goes a good way to meeting the problem but we can build on it further.

I look forward to engaging on it with the Minister tomorrow on Committee and Remaining Stages.

Colm Burke (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister and thank him for bringing forward this legislation. The problem of pyrite is one of the most frightening things for any family to encounter. I have worked in the legal profession and acted for builders where subsidence has occurred. In addition, I have worked for householders. Identifying and dealing with subsidence is one problem, but pyrite is a far more complex matter. It is frightening for families to have to deal with it.

This occurred in the period 1995-2007 when we had a major increase in construction. Between 2000 and 2006, there was an 88% increase in housing construction with 93,000 houses completed in 2006. In such a period, the necessary checks and balances were not always fully in place. Since all the checks and balances were not there, we did not react quickly enough when problems began to appear.

In fairness, however, Fingal County Council did react back in 2007 and probably put a hold on further problems arising since it identified the matter and acted upon it. Over 130 million tonnes of hard core was moved per annum in providing for both commercial building sites and dwelling houses. The report states that 74 estates were examined, affecting over 12,250 houses. I am not saying that this many homes were affected but concerns were raised about that number of dwellings. While initial concerns were raised in quite a number of estates, there have been no claims.

In one local authority area, 850 social and affordable houses were directly affected. This problem arose not only in the private sector but in the public sector. While regulation in this area has been improved we must be prepared at all times to review and update regulations in respect of the building industry. The cost of resolving this issue is huge for the State. The report was published in June 2012. I know that the Minister's efforts to get Home Bond and the insurance industry to participate in the scheme have not to date worked out. As stated earlier, it is unfortunate that all of the players involved were not more proactive in trying to resolve this matter.

The Minister referred in his speech to a case being dealt with by Mr. Justice Charleton in the Supreme Court. It is disappointing that this matter has not yet been decided on. The lack of decision by the courts in relation to this matter has created a vacuum in this area. There are many people waiting on the sidelines for that decision, which emphasises the necessity for the amendment of the Constitution in order that a Court of Appeal could be established. It is disappointing that that appeal has not been fast tracked. My understanding is the case has not yet been dealt with. However, I am open to correction on that. It is disappointing if it has not because the decision is vital in terms of the long term sharing of responsibility in relation to this matter.

This Bill is only the start in terms of dealing with this matter. It is constructive legislation in that it affords priority to houses in serious condition. It is only right that they should be given priority. I accept as stated earlier that the longer the problem goes unchecked the more expensive it will be to resolve it. The sooner we remove the houses affected from the list the sooner this chapter can be closed. I accept it will be some time before that happens.

I welcome the Bill which is well thought-out. While the situation may require to be reviewed in the future, it is important this legislation is enacted to assist the many people who have been severely affected, including in respect of obtaining home insurance. Insurance cover was also an issue in respect of the properties in Cork that were flooded. Likewise, in areas where there is evidence of subsidence insurance companies are refusing to provide cover. This is unfortunate. The Motor Insurance Bureau of Ireland deals with cars involved in an accident not covered by insurance. We may now need to consider whether we need to provide a central fund in respect of houses which insurance companies have refused to insure. It is an issue we should look at long term in relation to areas affected by subsidence, flooding and other unusual problems, such as that about which we are now speaking. We need also to discuss the issue of cost sharing by the taxpayer and the insurance industry, which in fairness is making substantial profits from home insurance every year. It should, therefore, be asked to make a contribution when such issues arise. Likewise, the building industry and other industries supplying to the building industry should be asked to contribute to address of this problem.

I thank the Minister for bringing forth this legislation. I look forward to the remainder of the debate on it.

Rónán Mullen (Independent)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister to the House. Like my colleagues, I, too, welcome this legislation. I intend only to echo many of the points made, although not in detail. It is important that this step is being taken. As stated by other Senators, it is one of the early chapters of a story that will be ongoing. We are all aware of the significance of the home in the human consciousness and of the terrible disappointment and inconvenience that people have suffered because of damage to their homes. I accept that the quarries may not have been aware of the presence of pyrite in infill. However, that others might be partially responsible through negligence and so on is disquieting. This can partly be seen as one of the legacy issues of an era when there was insufficient, inadequate or proper respect for people. This was evident in the lack of proper regulation in the construction industry.

I recall almost a decade ago when helping a friend who was running in the local elections in a Dublin suburb seeing for the first time the appallingly poor quality of development and lack of respect for people's needs in terms of the manner in which houses were designed and thrown together. There was no due regard to proper standards. This issue, although broader, can be linked in with that. Families in north Dublin, Louth, Meath, parts of Offaly and Galway have been affected by this issue. I echo the remarks by Senators O'Brien and Burke that what has to be done to resolve this problem is going to cost the taxpayer. It would be desirable that the construction industry, although on its knees, and the insurance industry, which is not, would play their part and contribute their fair share. I would be very supportive of any mechanism by which this could be achieved. It is a key value that what be done here be done at minimum cost to the taxpayer.

Another key value is solidarity with people and the homeowners who have been so badly affected. In this regard, perhaps the Minister will say if there is any good or principled reason to deny access to the scheme by people who not so such mitigated their loss but did take steps to improve their situation and who may now be at a significant financial disadvantage or much deeper in debt, because they were in a position to, or made sacrifices to, improve their situation prior to this scheme being put in place? Is it not wrong in principle and from the point of view of public policy not to engage with such parties and to allow them access to the scheme? The Minister said earlier that the scheme is not a compensation scheme, which I understand. Is there not an injustice in denying people who were in a position and did take steps to remediate their homes access to the scheme?

I am also concerned about the position of people who identify problems in the future. The Minister earlier quoted Mr. Justice Charleton who said: "It is not yet reasonable to remove the infill..... solely because of the high sulphur content of the infill." What will happen in the future? Presumably when a heave actually takes place people will be in a position to access support under the pyrite resolution scheme. That is an important principle. Comparisons are invidious but other groups - this issue has arisen previously, including in respect of former residents of the Bethany Home - in similar situations do not, and understandably so, see the justice of their being excluded from redress.

While comparisons are invidious, it seems a similar issue can apply with people who might emerge in the future. I am not assuming for a moment that it is not the Minister's intention. I understand this is the first step of an unfolding story, which is obviously of grave concern to the Government and the taxpayer. Whereas we fully welcome the Bill, there is a degree of uncertainty as we face into the eventual resolution of the problem. I will be supporting the legislation and I thank the Minister for it.

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister, who I believe will be spending many hours with us today. I congratulate the Government on introducing the Bill and the Minister's personal commitment to the issue has been noteworthy. It is long overdue for the many homeowners who have been victims of what is known as pyritic heave. Such a technical term belies the human misery suffered by individuals who found themselves trapped in homes they could not either sell or afford to repair and where the structural damage was extensive.

While the figures vary around the country, some 12,500 properties were damaged by this pyritic heave following the building boom. When this occurs, remediation costs on average €40,000 to €50,000 per home and involves the removal of the ground slab containing the pyritic material and its replacement with a new ground slab. It is very invasive and involves the family leaving the home, storing their furniture and engaging in fairly extensive renovations.

Some homeowners were fortunate enough to be covered by the premier guarantee, an insurance scheme operating in the construction sector and others had developers who made repairs. However, as we know, many homeowners were covered by HomeBond, which following a High Court decision in 2011 withdrew insurance cover for pyritic heave damage.

As has already been mentioned, the confirmed areas for pyritic heave were mostly concentrated in north Leinster, particularly in north County Dublin, Offaly, Meath and Louth. However, we need to bear in mind that in 2007 alone we built more than 80,000 housing units and we do not know the full extent of the problem. During the property boom the volume of quarried stone increased threefold between 1993 and 2007. In Fingal, Meath and adjacent areas, non-premium aggregate was supplied to meet this demand. While this would not have complied with the standards set by HomeBond, at the time there was no effective testing system to detect it.

The Minister established the independent panel which reported in June 2012. It is worth reading the executive summary of the pyrite panel report for a complete understanding of what happened. It is clear that no blame falls on the Government for its failure to uncover what some would have termed unacceptable practices that developed during the boom, including a lack of documentation setting out where backfill was sourced for housing. Today we are dealing with the last vestiges of some of the recklessness of the property boom. The pyrite panel made 24 recommendations, including establishing a new standard or specification for hard core under concrete floors, testing certification and traceability by quarries, evidence of periodic testing and so forth. However, in this instance the stable door and horse come to mind. In future we will not have this difficulty.

The Government has announced the allocation of €10 million to repair homes damaged by pyrite and the Bill before us sets out the manner in which this is to be achieved. I am concerned that the scheme will be confined to those homeowners who have no other way of rectifying the damage pyrite caused to their homes. The pyritic damage needs to be serious enough to meet specified criteria. It is a scheme of last resort. The Minister has explained why that is the case from the Government's perspective. However, there should be recourse for homeowners who do not qualify for the scheme or who have already paid out of their own scarce resources to remedy the damage. Through my work I am aware of many individuals who lived from day to day with gaping walls and enormous cracks in rooms, making them simply uninhabitable.

Nobody in their right minds, who could possibly raise the money to make the remedies, would continue to live like this. I would have preferred to have seen a compensation fund paid for by the various interested parties involved in the construction of those affected homes. That fund should have been established to remedy the damage that remains and compensate those who, themselves, paid to remedy the damage.

I believe the quarries involved, the construction sector and the insurance sector should be paying. HomeBond withdrawing cover in 2011 shows a serious defect in the protection given to homebuyers.

Darragh O'Brien (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Hear, hear.

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

In reality the HomeBond scheme was to give assurance to purchasers that any structural defects would be covered by the bond. It was a breach of trust for HomeBond to withdraw from pyrite damage, in the knowledge that homeowners had no way of dealing with the matter. If there was a third party with responsibility, then HomeBond should have paid up and pursued that third party itself. It is worse that HomeBond is a bond provider established by the construction sector for its own members, designed to give buyers confidence that defects in a new home would be fixed. Effectively the State is now stepping in to take over the responsibilities of HomeBond. When the construction sector is up and running again, I suspect that purchasers will not accept a HomeBond guarantee anytime soon. With evidence of increased demand for housing, the Minister might consider mandating an insurance scheme that will properly protect purchasers of new homes.

The scheme as proposed will mean that some homeowners will neither have the damage rectified nor be compensated for repairs they have made. I also understand that homeowners will carry some of the cost themselves in that items such as new flooring after amelioration, painting and decorating etc. will not be covered. All of those who are affected by pyrite should be compensated. If the construction sector cannot pay today, it should pay tomorrow. In environmental law there is a principle of the polluter paying. A home is the most expensive thing most of us will ever buy in our lives and we should be entitled to rely on it being constructed correctly. No stone should be left unturned by the Minister to ensure that those responsible for this debacle pay the full cost, including compensation in the course of time.

I have a question on the structure of the board and the scheme. I am very familiar with the Housing Agency which is an excellent body. Is it necessary to put in place a separate board? Could the Housing Agency not have carried out the work both of the board and the work as set out for it, including the procurement of competent professionals and contractors, arranging for the testing of dwellings, awarding contracts, and making payments in respect of the remediation work and all other ancillary costs? The proposed two-tier structure seems rather clunky.

I am pleased the Minister proposed a two-tiered appeals process, which will give some comfort to people applying to have their properties included in the compensation scheme.

The Bill represents a good day's work and I congratulate the Minister on the amount of effort and energy he has put into it.

Sean Barrett (Independent)
Link to this: Individually | In context | Oireachtas source

I again welcome the Minister. I commend him on the Bill. At this time of year we remember the late former Minister of State, Shane McEntee. I also commend Senator Darragh O'Brien and others who have worked on this problem.

I have all the reservations Senator Hayden has just expressed. There is a repeated trail of people coming into this House visiting their failures on taxpayers and on the Houses of the Oireachtas; the taxpayer always loses. The industry will not pay in this case and the insurance proved to be useless. That is in a queue behind banks, insurance companies, credit unions and pension funds, all of which in the recent past have been looking for dig-outs, bailouts and so on. As the Taoiseach said last night, we have put the taxpayers to the pin of their collars. We need to design tort law so that people pay up when they cause these problems because otherwise we will have a real moral hazard problem. They will never reform if they always roll over the Government and the Houses of the Oireachtas, and get away with their misdemeanours. The Minister should get together with the Minister for Justice and Equality, Deputy Shatter, to see if we could design laws to ensure that those responsible pay the bill.

It is interesting that in other countries, people who commit financial misdemeanours pay and go to prison. If Forbesmagazine gave Ireland that prize for protecting investors so much, it might be a prize we do not want. It is about time taxpayers were protected against inefficient people in the real economy. However, that issue is for another day. The Minister has stepped into the breach in succession to the former Minister of State, Shane McEntee, who took this issue very much to his heart and I support this Bill. The next stage must be to find out a way to get those who actually cause these problems finally to stump up some of the bill and not to keep sending it to the Minister and his Department.

Terry Brennan (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Everyone is aware that while the State is neither culpable nor liable for the pyrite problem, it nevertheless took responsibility to provide solutions for homeowners who, through no fault of their own, have been significantly damaged by pyritic heave and who have been left with no viable means of redress following the withdrawal of cover for pyrite damage by HomeBond in the summer of 2011. I note from the Minister's statement that the pyrite resolution board continues to engage with HomeBond with a view to agreeing on a process with which it can contribute to the remedial process, which is to be welcomed. The Minister stated it would not have been reasonable or defensible that affected homeowners, who have no viable option for redress, would be left without a resolution. The Minister and his officials have been working tirelessly over many months to put in place an alternative funding model for the pyrite remediation scheme. While recognising this has not been an easy task, having regard to budgetary constraints in the current climate, I note the Government has approved €10 million in initial funding and that additional funding will be allocated over the next two years from the capital stimulus programme. The Minister stated that approximately 1,000 dwellings are affected by pyritic heave and require immediate remediation. The pyrite resolution board, with support from the Housing Agency, will now implement this programme.

I again acknowledge and commend the Minister and his officials on the great work they have done in this matter. I also wish to acknowledge a conversation I had with the former Deputy Shane McEntee, in or around this week last year, in which he indicated his great concern for these people. He was extremely sympathetic and was deeply concerned. I acknowledge the part he had played prior to his death and the work his daughter, in following him, also has done. It would be remiss were Members in this House not to recognise all that had been done. I wholeheartedly welcome this most important Bill, which will give some comfort to many affected householders. It is to be hoped this important Bill will be accepted and agreed by all parties in this House and will be met with unanimous acceptance. Well done to all concerned.

Kathryn Reilly (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I also welcome the Minister to the House. I welcome this Bill, which represents a long overdue beginning to a resolution of the pyrite scandal and the trauma and disruption it has caused to so many lives and to families and homeowners in the affected areas. I wish to pay tribute to people such as Sandra and Peter Lewis and others in the Pyrite Action Group, who coolly and effectively lobbied over a long period for their voices to be heard and the wrongs visited upon them to be made right. Like other Senators, I wish to pay tribute to the late Shane McEntee, who worked very hard in his local area on this issue. As previous speakers have mentioned, the pyrite scandal is an extreme of example of the lax regulation, negligent building practices and development that happened during the so-called Celtic tiger years. It is not unrelated to scandals such as that of Priory Hall and others. All these were the result of greed, which drove Ireland in those times and meant that corners were cut, profits were maximised and responsibility essentially was reduced to not even being an afterthought. Homes were thrown up without any consideration for the quality of the work, location or materials. This placing of profit over quality led to the dream homes of many families essentially becoming a living nightmare as pyritic heave set in. Families that had spent huge sums and had taken on large debts were left with crumbling homes. A large responsibility in this regard should be placed at the doors of the quarry and construction industries, which failed to ensure their products and materials were up to standards. While it is most unfortunate that a levy scheme has not been worked out to see these parties pay their share, I am glad the scheme has not been delayed further by this. The Minister mentioned legal difficulties in his speech and he should refer to them further in his response. Other Senators also have mentioned a particular problem with the resolution process being that it does not include people who took it upon themselves to repair their homes. One must recall these people took the initiative to so do out of desperation, rather than in a situation in which the costs were easily afforded. While they no longer fall into a category of priority focus, in the longer term they should not be overlooked and should receive benefit of some kind further down the road.

The issue of HomeBond has been raised by a number of Senators and I could not make my contribution without referring to it and to the disregard it has had for its customers and how it has let down those customers extremely badly. Moreover, the manner in which it treated the Oireachtas committee when asked to appear before it to answer questions is indicative. I have a few concluding questions. The Minister mentioned he was in the process of engaging with HomeBond and he should provide Members with an update in this regard. Similarly, when does the Minister expect to receive the draft scheme from the board? While he mentioned it in his speech, what is the timeframe for this scheme following the enactment of the Bill? I acknowledge a funding allocation was made this year and further allocations will be made from the stimulus programme. What additional funding does the Minister believe is needed from that stimulus in practice over the next couple of years?

Ivana Bacik (Independent)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister to the House and welcome this Bill, which has clearly received a general welcome across the House. It is nice, when Members are debating other Bills that are not quite greeted with the same level of consensus, that this Bill has been introduced. Others have already spoken about the general recognition of the need to provide some resolution for the many homeowners affected by pyritic heave, which is a real affliction to their homes. However, as others, including my colleague, Senator Hayden, have already stated, it seems unfair that the taxpayer should be obliged to foot the bill. At the same time, the Government is facing up to responsibility and to dealing with mistakes made in the past and to making some form of amends for them. Others, including Senators from the benches opposite, have referred to the contribution made in this regard by the late Shane McEntee. It is nice that everyone recognises he had sought very hard to find a resolution for the homeowners and all Members welcome that with this Bill, some degree of resolution will now be put in place. However, as others have noted, it is to be hoped that at some point, the polluter will be obliged to pay at least something towards the cost of that resolution.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister is welcome to the House and I welcome his action on this issue. As other Members have stated, no blame is attached to the present Administration for the cause of the problem. However, I have considerable concerns regarding the cost to the State and the scale of the problem, which I believe to have been underestimated in the Minister's contribution today. As I do not believe the figures add up, I wish to explore with the Minister the full cost of this problem. Several times up to now, the Minister has been asked questions in both the Dáil and the Seanad on the full cost of the pyrite problem to the taxpayer. I note that on all occasions, he has avoided this question either by refusing to answer or by stating the post-2015 funding position will be dealt with having regard to the position at that time and developments in the meantime.

What does that mean? The provision is unacceptable considering that the taxpayer must fund the problem because the Minister has not implemented the recommendations in the report of the pyrite resolution panel. The report has stated that after the initial €10 million allocated in the budget for 2014, additional funding will be allocated over the next two years from the capital stimulus programme. I have read the report. Its 200 pages contains a table, table 4.2, that points out that the average cost per house is €45,000 and a total of 10,300 houses that have not as yet been tested or remediated, which could mean a potential future cost in excess of €460 million.

Let us examine the figures. There are 1,100 houses in need of remediation and the Minister has provided €10 million. However, with the average cost per house being €45,000 and given the number of homes involved, it will need to provide €49.5 million. Can the Minister tell us where the remaining €39.5 million will be sourced? Has the taxpayer to foot the bill? There is an extra 10,300 houses located in the same estates that have not yet been identified as being affected but that could happen. As Members have said here, future houses where the same materials are used and houses that have been remediated, in the interest of fairness, deserve to be beneficiaries of the scheme. I am not saying that the State should pay it all. I ask the Minister to clarify the following. What will be the full cost of the scheme for the 1,100 houses and what is the shortfall? How much will it cost for the 10,300 houses located in the same estates, should that arise?

I agree that the State must take charge of the problem and compliment the Minister for doing so. It should ensure that all owners are promptly and fairly compensated for a problem not of their making. However, the Minister must ensure that those responsible for the problem are made to bear the cost. I welcome his confirmation that he will table some amendments on same tomorrow evening.

I agree with the recommendation in the pyrite report that states:

It is the view of the Panel that funding for the Resolution Board should not come from the Exchequer. It could come from, for example, the imposition of a levy on the construction/quarrying sectors and on the related insurance cover for those sectors or other similar sources.

I do not accept that the people who caused the problem should not pay. I am very concerned that remediation is to be carried out by the Irish Concrete Federation, CIF, and HomeBond. Therefore, they will benefit from this Government and taxpayer funded scheme but they do not pay. That is not right and is appalling. The chair of the remediation scheme panel is Mr. Jim Farrell, managing director of Roadstone.

Jillian van Turnhout (Independent)
Link to this: Individually | In context | Oireachtas source

I ask the Senator not to mention names and advise her that her time is up.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context | Oireachtas source

It does not look good.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Not true. The Senator does not have her facts right.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Please correct me.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am happy to listen to correction. The situation does not look or sound good and the problem must be addressed. The taxpayer should not have to pay but a levy should be imposed on the industry. I want an explanation for why that cannot be done when there is precedent.

Jillian van Turnhout (Independent)
Link to this: Individually | In context | Oireachtas source

I thank the Senator. As no other Senators have indicated a wish to speak, I call the Minister.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank all Members of the House for their support of the legislation. I thank the Pyrite Action Group who lobbied, through their public representative across the various counties and the wider public, because of the serious concern that individuals had for the plight of the homeowners who ended up with a pyritic problem, through no fault of their own. I thank all of the public representatives for their measured and constructive contributions to the debate and for finding a solution, especially my good friend and colleague, the late Deputy Shane McEntee, who was mentioned by other people.

Today marks a significant step forward. We wish we had a different solution. I shall answer the matters raised by Senator Healy Eames later. We could not sit idly by as a Government. We wanted to find a solution because people had been badly affected and held no hope of a solution. That is why it has taken a lot longer than I expected, and I acknowledge that. The consequent work that we did, with the pyrite resolution panel, indicated the extent of the problem. I do not know how extensive the cost will be because we have not sought applications. We did ask people with a high level of expertise to assess the extent of the problem. Perhaps the Senator knows more about pyrite than the independent panel that I have established. I trust it to carry out its work, to show me and inform me. I am not concerned about the speculative figures that she mentioned that were off the top of her head.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context | Oireachtas source

The figures are from the panel's report.

Jillian van Turnhout (Independent)
Link to this: Individually | In context | Oireachtas source

The Minister please, without interruption.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am not into speculative figures or figures off the top of one's head remarks. I am considering, in a qualified way, the type of categorisation that the panel put on the extent of the problem. It said there is between 850 to 1,000 homes in urgent need of remediation and that is what the scheme is about.

The quality of the built environment affects the quality of everyday life, as Senator Hayden said in particular. We must learn from past mistakes and show everyone that we do not want the type of problems that we have had with Priory Hall, unfinished estates or pyritic problems visited on people again. That is why I have taken many steps to put in place a more robust regulatory regime that will provide greater protection for the consumer.

As Senators will know, I signed the Building Control (Amendment) Regulations 2013 into law earlier this year. Some professionals do not want new regulation. All new building projects, commencing on and from 1 March 2014, when the new regulations take effect, will require design drawings and particulars to be lodged with the local building control authority. Inspections will take place during construction and they must be overseen by a registered construction professional. Also, certificates of compliance will be signed by the lead designer, the builder and the person we call the assigned certifier.

We believe that the numbers that we have identified are credible. We do not think the problem has been understated. We must remember that the scheme is restricted. As Senator Barrett rightly pointed out, taxpayer's money will be used to fund the scheme and, therefore, it cannot be open-ended.

With regard to Senator Darragh O'Brien, commercial properties are generally built under contract and the parties have recourse to enforcing the terms of the contract. An individual homeowner does not have the same redress.

Darragh O'Brien (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is that so?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Perhaps we can discuss the matter on Committee Stage. I shall return to the matter then.

Darragh O'Brien (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is fine.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I agree that it is unreasonable to expect dwellings not exhibiting damage to be remediated. There are limitations on the funds available so we must have some restrictive scheme in place, as a last resort, to help the people that are in urgent and immediate need of remediation.

I am concerned about problems relating to insurance cover and, more correctly, the restrictions that are being imposed by some companies on homes that had been remediated. I shall raise the matter with the insurance industry federation. This should not be the case. Homes that are remediated should not be refused cover.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It would be easy to say that the regulatory system was deficient but that is not true. Builders and developers are obliged under building regulations to use proper materials. There is an obligation on suppliers to supply materials that are fit for purpose.

I agree with everyone in the House who said that the people that caused the problem should pay but we ran into legal difficulties under constitutional property rights regarding imposing a levy on the quarrying and construction sector. We got no co-operation whatsoever from the general insurance sector. We got very little co-operation from HomeBond and Premier Insurance. I can assure the House that I have explored every legal avenue that was open to me to see if we could impose a levy on the stakeholders who caused the problem.

It was not possible for us to get a scheme that was legally sound, and I did not want to establish a scheme giving hope to people who are affected only to have it struck down by the courts and another protracted legal challenge that would drag on for perhaps three or four years. It is for that reason that I appreciate the Government's decision to assist me in this process. I have the understanding of all Ministers at a time when we do not want to be imposing any more on the taxpayer. It has been the difficulties and the hardship people have gone through in their individual circumstances on a human level that has brought about a decision to have a €10 million scheme initially. The Minister for Public Expenditure and Reform, Deputy Howlin, and I are examining the capital stimulus programme in 2014 with a view to providing additional resources but we will wait to see the numbers that will come into the scheme. We are conscious the scheme will continue for two years. We are dealing with the red category initially and when we are at the stage of receiving applications, I hope we will be able to get a full picture of the extent of the problem.

To reply to Senator Healy Eames, the difference is that when the banks and the State got involved in the insurance sector years ago, they got an agreement. They agreed there would be a levy. We do not have an agreement. That is the difference.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Why can we not be informed?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have just explained to the Senator the legal complications I face. The Senator may be an expert on law but I have to deal with the Attorney General and the legal resources in my Department to advise me. I gave her the background in terms of the difficulties that arose. I do not want the unfortunate home owner to be put into a protracted legal issue again. We cannot say how much it will cost when we are not sure about the numbers. When we see the level of applications, we will be in a position to know the extent of the cost. Some houses will be more affected than others. Senator O'Brien mentioned estates that do not want anybody to know they have a pyritic problem but, nevertheless, they have to be resolved in some way. If someone is living in an estate of, say, 50 houses and six or seven of them have a pyritic problem, we would want to ensure the entire estate is clean of a pyritic problem to help marketability, insurance cover and all the issues with which we are very familiar. The pyrite resolution board will deal with those issues as best it can.

Seventy-four estates have been identified as being in serious difficulty. Regarding HomeBond, levies and all those issues, HomeBond is a private company and the reality is that the State cannot confiscate the money from it, but I assure the Senator that I will do everything I possibly can, morally, legally and otherwise, through measures we will be taking in future for the construction industry, to ensure there will be an opportunity for me to get HomeBond, Premier Insurance and others that have not co-operated on this occasion to the table in a more concerted way. Equally, a contribution through the court process that will present itself arising from decisions of the Supreme Court may give me an opportunity to get some money back from the quarrying and the construction sectors.

I am conscious that we should not be doing this as taxpayers but I explained the background and the legal difficulties, and I have to come to the House for the purpose of having this scheme established. I would not be here otherwise.

I thank the Senators for their contributions to the debate on the Bill. It is urgent legislation because it has dragged on for about a year longer than I would have wished, but I appreciate the indulgence of the House in coming forward with its support. We will examine the amendments Members brought forward, and I will table some amendments also on Committee Stage.

Jillian van Turnhout (Independent)
Link to this: Individually | In context | Oireachtas source

When is it proposed to take Committee Stage?

Ivana Bacik (Independent)
Link to this: Individually | In context | Oireachtas source

Tomorrow.