Written answers

Wednesday, 20 May 2020

Department of Housing, Planning, and Local Government

Social and Affordable Housing

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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1338. To ask the Minister for Housing, Planning, and Local Government if the public sector benchmark used for the first bundle of social housing public private partnerships will be published; and the status of each of the three bundles of the social housing PPP scheme by numbers of units, locations of units, names and members of the consortia delivering the bundles and the total cost of each bundle. [5863/20]

Photo of Eoghan MurphyEoghan Murphy (Dublin Bay South, Fine Gael)
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The Social Housing Public Private Partnership (PPP) Programme is designed to deliver approximately 1,500 social housing homes in total, via three bundles.

The first bundle, which comprises six sites, will provide 534 homes across the Greater Dublin Area, as set out in the following table.

Site (Local Authority) Number of Homes 
Ayrfield, Malahide Road (Dublin City) 150
Corkage Grange (South Dublin) 109
Scribblestown (Dublin City) 70
Dunleer (Louth) 80
Convent Lands, Wicklow Town (Wicklow) 51
Craddockstown, Naas (Kildare) 74
Total 534

The contract with the winning bidder for this Bundle, Comhar Housing, reached Financial Close on 19 March 2019. This consortium comprises Macquarie Corporate Holdings PTY Ltd. as primary equity provider, Sisk as Construction Contractor and equity provider, Choice Housing as Facility Managers and Oaklee Housing (AHB) as tenancy management service provider.

The full value of the Bundle 1 contract, the duration of which includes the construction period plus a 25-year operating period, is estimated in nominal terms at €301 million (exclusive of VAT but including a forecast of inflation). This cost was publically released following financial close of the project and includes all construction costs plus maintenance, operating, lifecycle, tenancy management and financing costs.

Construction under Bundle 1 was well advanced prior to the closure of sites as a result of COVID-19. While the full impact of Covid-19 measures on the programme has still to be determined, the first homes from this bundle are expected to be completed in June 2020. Upon completion, service provision under the contract will include building and asset management, waste management, security, void management, tenant helpdesk services and the provision of community development services.  At the end of the service period, the homes will be handed over to the relevant local authority.

Bundle 2 of the programme will provide 465 homes across eight sites, as set out in the following Table.

Site (Local Authority) Number of Homes
The Walk, Roscommon Town (Roscommon) 53
The Miles, Clonakilty (Cork County) 52
Slievekeale (Waterford City and County) 58
Ballyburke (Galway City) 74
Shannon East (Clare) 51
Poundhill, Skibbereen (Cork County) 50
Oakwood, Macroom (Cork County) 50
Butterstream, Clane (Kildare) 77
Total 465

The contract with the winning bidder for this Bundle, Torc Housing Partnership, reached Financial Close on 27 November 2019. This consortium is comprised of a joint venture of JJ Rhatigan & Co. and the Spanish firm Obrascon Huarte Lain S.A. as construction contractors. Upon completion of construction, facilities management will be provided by Derwent FM and Tuath Housing Association during the 25-year service period, with Tuath also providing tenancy management. These bodies are also providing equity for the project in conjunction with the primary equity providers Equitix Ltd. and Kajima Partnerships Ltd. The German bank Nord/LB is providing debt funding for the project.

The full value of the Bundle 2 contract, the duration of which includes the construction period plus a 25-year operating period, is estimated in nominal terms at €253 million (exclusive of VAT but including a forecast of inflation). This cost was publically released following financial close of the project, and as per Bundle 1, this includes all construction costs plus maintenance, operating, lifecycle, tenancy management and financing costs.

Construction had commenced on the Bundle 2 sites prior to the onset of COVID-19 and, similar to Bundle 1, the full impact of the Covid-19 measures on the programme remains to be determined. The service provisions attached to the contract are also consistent with Bundle 1 and at the end of the service period the homes involved will be handed back to the relevant local authority.

Preparation work has recently commenced on the third Bundle of sites in the programme. A number of sites were proposed by local authorities on foot of a request seeking nominations of sites for consideration as part of the third bundle. Following examination and evaluation of the sites proposed, initial approval in principle was communicated to the successful local authorities in October 2019, subject to final due diligence that has recently been completed. Three sites were selected in the Dublin City Council local authority area, and one each in Kildare, Sligo, and Wicklow.

The following table sets out the indicative number of homes that will be provided at each of these locations pending the design and planning phases, with the total number of homes across the whole bundle expected to be in the region of 440.

Site (Local Authority) Indicative Number of Homes (pending design and planning)
Ready Mix Site, East Wall, Dublin 3 (Dublin City) 65
Shangan Road, Ballymum, Dublin 9 (Dublin City) 100 Senior Citizen Units
Collins Avenue, Dublin 9 (Dublin City) 90
Ardew, Athy (Kildare) 60
Rathellen, Finisklin (Sligo) 50
Blessington (Wicklow) 76
Total c.441

The National Development Finance Agency (NDFA), in its role as procuring authority and financial advisor, and Dublin City Council as lead local authority and Sponsoring Agency, have commenced the initial planning for the tender process and engagement with the relevant local authorities.  It is planned that tenders will be invited in 2021 and therefore it is not possible to give details on costs at this stage.

The Public Sector Benchmark (PSB) is an essential part of any PPP project. It contains commercially sensitive information in relation to the methodology used for costing public sector projects and for the pricing of risks by public sector bodies. In accordance with Department of Public Expenditure and Reform guidelines (Guidelines for the use of Public Private Partnerships), the final PSB, or any elements thereof, is not made public during the tendering process nor where it is intended to procure further similar projects in the near future (e.g. subsequent project bundles as part of an ongoing PPP programme). As Bundle 3 will follow the same structure as Bundles 1 and 2 and given the potential impact on value for money for the State, it is not appropriate to release the PSB for Bundle 1 at this time.

However, and in accordance with Department of Public Expenditure and Reform guidelines, once an appropriate period of time has elapsed and the commercial sensitivity of the information on the project is no longer an issue (having regard also to any other similar PPP projects which may be in pre-procurement), the PSB should be made public. My Department will follow these guidelines in relation to the social housing PPP programme.

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