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Dáil
‹ Leaders’ Questions.

Dublin Regeneration PPP Withdrawals

Summary

Gilmore raised the developer’s withdrawal from five Dublin regeneration partnerships, putting more than 1,000 social and affordable homes and community facilities at risk, and sought swift action and clarity on other projects. The Taoiseach acknowledged the setback, said he had requested a report from the Minister, and noted no further withdrawals had been reported.

Yesterday, a major developer, the McNamara-Castlethorn consortium, withdrew from five public private partnerships with Dublin City Council for the regeneration of several areas of the city, including St. Michael's estate in Inchicore, O'Devaney Gardens, Dominick Street, Infirmary Road and Seán McDermott Street. These projects involved the provision of more than 1,000 social and affordable housing units, along with community and neighbourhood facilities, in an effort to regenerate and revitalise areas which are among the most disadvantaged not only in Dublin city, but in the State. Much work was done over a seven-year period in bringing forward these regeneration schemes. This involved consulting with the communities themselves and with the wider neighbourhoods to agree the schemes that were eventually devised. In anticipation of the work, a considerable amount of detenanting has taken place within those areas. In O'Devaney Gardens, for example, four of the 14 blocks have been detenanted. Similar levels of detenanting have taken place in the other estates.

The people living in these estates are absolutely devastated that their hopes for the regeneration of their homes and neighbourhoods are now dashed. Several questions arise. What can the Taoiseach say to the people living on these estates and whose hopes have been so badly damaged by yesterday's announcement? What hope can he offer them that the regeneration will proceed as planned? What alternative arrangements will be put in place to ensure this is so? Why was the same developer awarded the contract for all these schemes?

What penalty clauses, if any, were attached to the contract which allow the developer to withdraw at this late stage? As we said last week during an exchange of opinions on this area, public private partnership should not only exist when times are good. The concept includes the idea that the partnership should also be there when times are tightening. It should not be the case that the Exchequer takes all the risk and the developer pulls out when the situation gets trickier. Are we likely to see the plug being pulled in coming weeks or months on any other public private partnerships in which either this or other developers are engaged?

Comment on this

I have asked the Minister for the Environment, Heritage and Local Government to provide me with a report on this matter arising from yesterday's developments. I will answer Deputy Gilmore's questions to the best of my ability. I acknowledge that this is a setback for those communities who have been working hard in conjunction with the city council to devise regeneration plans for their areas. These are areas where we would like to see improvements and regeneration take place.

Following the withdrawal of the developer from the public private partnership projects in question, I understand members of the regeneration board had a meeting with city council officials yesterday. Despite this setback, there is a continuing commitment on the part of the council to prioritise the prospect of regeneration for these communities. This may involve approaching other developers who have indicated an interest in participating in public private partnership. The public private partnership contracts with the developer are not available to me and I am not in a position to answer questions about the details of those contracts. However, I will seek to find some information on this for the Deputy.

The Deputy referred to the detenanting that has taken place in these areas. The need to provide housing for these people as quickly as possible, whether through a reactivation of the public private partnership process in conjunction with a different developer or via a phased development based on a more traditional procurement method, is a priority for the city council. That is a matter for consideration by Dublin City Council officials as they seek to assess where they go from here and decide the next steps in dealing with this setback.

Comment on this

The difficulty is that the physical conditions in the estates in question are probably worse as a consequence of the detenanting that has taken place. We do not want a situation where people must continue living in poor physical conditions and in circumstances where the hopes they had for the regeneration of their homes and neighbourhoods are entirely dashed. I hope arrangements will be put in place quickly to ensure these schemes proceed without delay.

Are we likely to hear other news about public partnership projects in conjunction with the same or other developers? For example, will the Finglas village project, in which I understand the same developer is involved, proceed as planned or will the plug be pulled on that also? I notice a proposal has been withdrawn from the Dáil Order Paper in respect of the building of the prison at Thornton Hall. I understand the same developer is the proposed builder of Thornton Hall prison. That proposal was to have been brought before the Dáil today and tomorrow for approval but I note it has been withdrawn. Is the developer proceeding with the Thornton Hall prison or has there been a change in that regard? Does yesterday's announcement regarding projects in Dublin city have implications for the developer's involvement with that project? More generally, what are the implications for the public private partnership method of providing social and public infrastructure? Yesterday's events will certainly dent the confidence of public authorities engaging with developers on projects of this kind if the plug is so easily pulled at the last minute.

Comment on this

Since this arose yesterday, no further suggestion has been made beyond those which are in the public domain. At this stage, I await a report from the Minister for the Environment, Heritage and Local Government on his assessment of the full situation as best he can gauge it. It is only fair to say that PPP models differ. These projects involved Dublin City Council leveraging the grounds it owned by means of a PPP so that residential social and affordable housing could be built in addition to other mixed developments which would be sold on by the developer to help finance the construction of social and affordable housing to meet the requirements of existing tenants and occupiers. The intention is to bring about regeneration and a greater community spirit not only in terms of residential housing but also by developing other much needed facilities for the area. That model was applied in Fatima Mansions and other successful projects which have been seen to bring a lot of added value and helped to restore and support the communities in these areas.

The Thornton Hall project involves a different PPP model based on the construction of the prison and staged annualised payments thereafter. I have received no indication from the Minister for Justice, Equality and Law Reform that the project has stalled. We are at an advanced stage of the process, although I understand it has not yet been finalised. An additional purpose of that proposal is to facilitate the development of prison complexes in the inner city which will greatly enhance the quality of life for people living there.

To answer the Deputy's question as best I can, as of today, I am not aware that any further issues have arisen but that will become clearer when the Minister for the Environment, Heritage and Local Government has an opportunity to assess the situation. The Thornton Hall project involves a different model and is not complete at this stage in respect of the PPP issue. Specific issues arise in respect of the residential aspect, market conditions etc., which are impinging upon the viability of this project as it stands. The issue now for tenants and Dublin City Council is to take the next step by working with the local regeneration boards on determining whether other developers can become interested in completing the project as envisaged and the extent to which traditional procurement of housing by local authorities in those areas can be part of the solution.

In regard to those who may wish to be de-tenanted to live in better conditions pending the development of their areas, I am sure that process can continue. As Deputy Gilmore noted, not all the areas have been de-tenanted and that varies from estate to estate. These are issues which Dublin City Council will consider. I note the council continues to contend this is a priority for it. We are spending just less than €1.5 billion annually on social housing, over €200 million of which has been allocated to Dublin City Council. The council's housing programme contains a multi-annual commitment to housing which is very considerable, and rightly so. We will have to determine what this setback means for the projects and whether they can be reconfigured or if traditional procurement will have to play some part in the rehousing process.

Comment on this

Do not offend McNamara whatever you do.

Comment on this