Dan Boyle (Cork South Central, Green Party)
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Question 127: To ask the Minister for Finance the costings which are being provided, in view of the fact that it is accepted that it will cost over €1 billion to provide accommodation for office relocation throughout the country for Departments and agencies, in terms of logistics and ancillary costs; and if he will make a statement on the matter. [29976/04]

Tom Parlon (Laois-Offaly, Progressive Democrats)
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I propose to take Questions Nos. 110 and 127 together.

The Budget Statement 2003 set out a major new programme of public service decentralisation involving the relocation of 10,300 civil and public service jobs to 53 centres in 25 counties. Further announcements since then increased the scope of the programme to over 10,500 jobs in more than 56 locations.

My office has been tasked with procurement of development sites in the designated locations and the procurement of accommodation solutions to the office and facility requirements of the Departments and agencies involved. Following the requests for property proposals, the Office of Public Works received in excess of 700 proposed property solutions in relation to the decentralisation programme scheduled for the various locations around the country. Detailed evaluation of these proposals has been undertaken and the Office of Public Works has made significant progress in sourcing possible sites at the locations concerned.

The evaluation process involves the following three-strand approach: an architectural assessment by OPW architects; a valuation process undertaken by both OPW and private sector valuers; and an assessment by reference to the business needs and staff requirements of each decentralising Department or agency.

To date, eight property solutions have been agreed in principle and a further 20 are at an advanced stage in the acquisition process. The balance of the sites will be pursued over the coming months.

A broad range of factors will influence the selection of sites and these include: proximity of the site to commercial, leisure and educational facilities; proximity to public transport; access to and from a good quality road network; and zoning for development. The prevailing property market conditions in each geographical area will also have a significant bearing on the acquisition of sites. In the circumstances and taking into account that the acquisition process is still in progress, it is not possible at this stage to provide a precise estimate of the cost of the site acquisition programme. However, for working purposes only, an indicative figure of €75 to €100 million is being used by the OPW.

The next stage in the decentralisation process will focus on the construction of office accommodation on the sites being procured by OPW. The decentralisation implementation group recommended a public private partnership approach, where appropriate, to the procurement of the office accommodation. Consequently, my office has been developing a comprehensive risk-adjusted costing of project elements to measure the value for money of future PPP bids, in addition to examining the appropriateness of using traditional procurement methods. It is expected that the scale and locational profile of some decentralisation projects will not fit within a PPP procured model. Accordingly the cost profile of such projects may vary from the PPP model.

It is anticipated that, in the vast majority of cases, the accommodation facilities will be provided by the construction of new office buildings and cost estimation can be approached on that basis. However, in advance of actual market testing of any procurement methodology, it is possible, at this time, only to assign the most general measurements of cost to such a large-scale, diverse and complex programme.

It is estimated that approximately 210,000 sq. m, or 2.26m sq. ft, of office space will be required to accommodate the total numbers included in the programme. Current industry cost norms in respect of commercial offices would indicate an average build cost to fit-out standard, in the range of €1,450 per square metre to €2,000 per square metre. Such figures exclude VAT, professional fees and inflation. In addition, the cost of equipping the accommodation to standard office equipment levels could be estimated at c.€4,000 per person. This would exclude the cost of information and communication technology and specialised equipment requirements.

Such general measurements of cost do not include specialised facility and equipment requirements and other variables which would arise from the spread of possible procurement methodologies. In addition, general cost indicators of this type show a snapshot in time. The chairman of the decentralisation implementation group laid out a sequencing approach to members of the Joint Committee on Finance and the Public Service on 6 October. The group's views on sequencing and timing are to be submitted to the Cabinet sub-committee on decentralisation for its consideration. The outcome of these deliberations will clearly have an impact on how we can more closely assess programme costs going forward.

It is self-evident that a firmer scale of costs for the decentralisation programme will only emerge on foot of actual cost proposals being received from the market. Nevertheless we can clearly anticipate that, generally-speaking, the cost of providing accommodation infrastructure in provincial locations compared to central Dublin locations should yield considerable cost savings to the State over time in terms of site costs, capital build costs and maintenance costs.

In relation to non-property costs, my Department, at the request of the decentralisation implementation group engaged consultants to identify the areas in which non-property related costs and savings would arise in both the transition phases and in the longer term. I understand that this report has been received and further information concerning these issues will be made available shortly.