Seanad debates
Tuesday, 16 October 2018
Commencement Matters
Construction Contracts
2:30 pm
John O'Mahony (Fine Gael)
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I welcome the Minister of State, Deputy Phelan.
Maire Devine (Sinn Fein)
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I welcome the Minister of State to the House. I raised this issue because of the delay and difficulties in which MDY Construction has found itself, and I seek clarification. In April, the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, attended, as did I, the turning of the sod at Dolphin Park, which would provide senior citizens with new, modernised units. The present accommodation there is unfit for habitation and, therefore, we were providing senior citizens with fit-for-purpose accommodation. Everyone was excited and delighted to be there, and the elderly people, in particular, were looking forward to it. They were looking out their window at the site, watching the progress when, all of a sudden, the subcontractors went in at the beginning of September and pulled out all their equipment, saying that they had not been paid and could not stand over not being paid, having their equipment used or remaining at the site.
There is also a half-built primary care centre in Rialto, Dublin 8. The walls have been put up, in any case. It is under the same construction firm, as are the social housing units in Cherrywood, which is also in Dublin South-Central. The houses were due to be handed out approximately two or three weeks ago, people had been told that this or that house would be theirs, and they had managed to negotiate with their landlords to continue their tenancy in rented accommodation because there were some delays. They had put their children into local schools and were delighted that this social housing had come to fruition, as some 95% of it has, yet many of the units still have to be allocated and keys must be handed over.
I accept that the Minister was working towards a solution and trying to ensure these social housing buildings, the primary care centre and the senior housing units would be completed as soon as possible given the overall homelessness and housing situation. Will the Minister of State update the House on the difficulties that MDY Construction faces, and how, with his assistance and support, these units will be delivered?
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I am taking this issue on behalf of my colleague, the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy. I must clarify that the Minister and the Department are not party to any contract with MDY Construction, nor does the Minister have any responsibility for the development of the primary care centre, which forms part of the Senator's query.
Delivery of social housing is achieved, however, using a range of different delivery programmes and financing arrangements. This includes supporting both local authorities and approved housing bodies to engage with contractors for the construction of new social housing homes. I understand from departmental officials that MDY Construction is experiencing serious financial difficulties and that the High Court appointed an interim examiner last month, with the case due to be heard again on a date later this month. This represents an opportunity for the company to restructure its finances and seek new investment, if required.
On the 43-home scheme for older people at Dolphin Park, Rialto, FOLD Ireland is the contracting body responsible for the project, delivering on land that was transferred to them by Dublin City Council.MDY Construction Limited was contracted directly by FOLD Ireland to undertake the construction following a tender process that concluded earlier this year. My colleague, the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, formally turned the first sod on the site when construction began in April of this year. As the contracting party, FOLD Ireland is dealing directly with the issues arising from MDY's current position.
I am informed that construction work ceased on the Rialto site several weeks ago when MDY personnel left the site. Since then, and following on from the appointment of the interim examiner, FOLD Ireland has met the examiner and its law agents to discuss the options available to it, as well as the next steps to facilitate the earliest possible recommencement and completion of this project.
There is no doubt that this turn of events will delay the delivery of these much-needed new social housing homes but FOLD Ireland is doing all in its power to progress the project. It has a proven track record in providing housing specifically designed for older people. The necessary steps have been taken by FOLD Ireland to secure the site, the legal and financial issues are being addressed and FOLD Ireland is taking steps to support the earliest possible completion of the projects. The Department has been and will continue to keep in close contact with FOLD Ireland and Dublin City Council on this scheme.
The provision of the funding and support necessary to complete this project and the other social housing projects currently affected will not be an issue. Local authorities and approved housing bodies know that. They are taking the necessary steps to handle the issues involved as a matter of urgency and to move the projects forward.
These social housing homes will be completed and they will be made available to the people who need them, fully complete and built to the usual high quality in social housing developments being completed each month in many locations around the country.
Maire Devine (Sinn Fein)
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I thank the Minister of State for his reply. There is a difficulty that most people would not understand. While FOLD Ireland is responsible for the development, I am sure the Government can get updates and influence to some degree a solution to this. If FOLD Ireland is to meet soon with the construction firm in question, does the Minister of State believe a solution will emerge which can fast-track the finishing off of some of the units and the half-built ones, which need to be completed as soon as possible? The senior citizens involved were looking forward to moving into the development in Dolphin Park by January. These units would provide them with modern housing and prevent illness. While FOLD Ireland is a great organisation, which looks after our senior citizens very well, will the Minister of State get in contact with the body to find out what is happening and apply a little pressure?
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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The issue will technically be before the courts again in several weeks' time and the Department is not directly involved in this issue. FOLD Ireland is a housing body and has a good record on delivery. The issue is that the construction firm, MDY, has that month-long period to indicate to the High Court judge that it has the facility to turn its financial situation around and to take the necessary measures for refinancing or extra investment. This examinership procedure was introduced in the late 1980s or early 1990s after it had operated for years in Britain and other countries. It has been successful, by and large, because it gives the protection of the courts to companies that are in some difficulty. It ensures they cannot be foreclosed upon while this structure is there. It gives a breathing space to see if they can work their way out the issues. We will know more when it goes before the High Court again.
I accept that is not a hugely satisfactory answer, other than to say the first priority for central government, local government and FOLD Ireland is that contractors will see out their contract and finish the job. We will have to cross the other bridge if that is not the case. However, for now, we are pursuing the first option.