Public Accounts Committee: OPW
Deputy Marc Ó Cathasaigh: I thank the witnesses for their opening presentations and for
the materials provided. I will start with the issue of rapid-build modular housing for Ukrainians,
people arriving under the temporary protection directive. I do not know if people remember the
kind of mini press furore when Passport Express was renamed Post Passport. It did not do the
Deputy involved in that story any harm. She is now a Minister of State. Looking at rapid-build
accommodation, I wonder if this needs a similar renaming. We could have delivered conventional housing within this timeframe. I say this because we are talking about a two-year process
from the start to the finish. I think most conventional builders would say they would be able to
get something across the line in that time as well. What will be the anticipated cost per unit by
the time we arrive at the 700 units being complete?
Mr. John Conlon: I will address the Deputy’s first comment to begin with because I think
it will help to explain the response to the second question he has asked as well. Regarding the
“rapid build” moniker applied to this type of accommodation, I think this should be taken as
how quickly it is possible to get the modular units built in the factories where they are being
constructed.
Deputy Marc Ó Cathasaigh: I understand modern methods of construction, MMC.
Mr. John Conlon: Yes.
Deputy Marc Ó Cathasaigh: My issue is that I do not believe these units were brought to
sites anywhere close to quick enough considering the crisis we face.
Mr. John Conlon: I think the big problem, and I can ask my colleague to develop this point
further, with the sites we have and are developing across the country was the huge difficulty we
had in getting them ready to construct and place the modular units on. Across these 11 sites, we
had consistent difficulties with many of them in relation to bringing them to a state of preparedness that would allow the modular units to be placed on them.
Deputy Marc Ó Cathasaigh: I understand that. I have an awareness of particular sites
where there was difficulty doing this. I have an issue around the entire process whereby various organs of the State were asked for sites and the OPW had to pass up 78% of those offered.
Mr. John Conlon: Correct.
Deputy Marc Ó Cathasaigh: That gives me a very clear indication of what kinds of sites
were offered to the OPW. I am not really going to go any further than that because I will just
get cross and I do not think I will learn anything from doing that.
Mr. John Conlon: I appreciate the concern—–
Deputy Marc Ó Cathasaigh: I wish to return to the question of the anticipated cost per
unit.
Mr. John Conlon: Regarding where we are at now, we have not fully finalised the costs for
this process because we still have several sites to finalise.
Deputy Marc Ó Cathasaigh: What is the anticipated cost per unit?
Mr. John Conlon: At this stage, we think that it will be in the region of €350,000.
Deputy Marc Ó Cathasaigh: It will be €350,000.
Mr. John Conlon: I think it is useful to break down these costs because, as I have indicated, the site development costs are an extremely significant part of the per-unit cost. I ask Mr.
O’Connor to give some detail on this matter. In terms of where we were able to manage costs
best, it is on the modular—–
Deputy Marc Ó Cathasaigh: I will ask a general question before we get into the specifics.
I understand there are challenges around undertaking this endeavour. Mr. Conlon is saying that
the average cost per unit is going to come out at approximately €350,000. Do we have a market
valuation per unit? I ask this question because these units are supposedly here for the long haul
and built to last 60 years. If we are talking about a cost of approximately €350,000 in Dublin
city centre, we would be talking about something that is fantastic value. If we are talking about a cost of approximately €350,000 in Tallow, County Waterford, we are not talking about fantastic value. Do we have a market valuation per unit?
Mr. Ciaran O’Connor: I can answer that. A market evaluation would not be appropriate
in this case because—–
Deputy Marc Ó Cathasaigh: Well, they are going to be here for 60 years.
Mr. Ciaran O’Connor: We would expect it to be even longer, perhaps twice that length of
time.
Deputy Marc Ó Cathasaigh: We know the temporary protection directive was extended
for one year.
Mr. Ciaran O’Connor: Yes.
Deputy Marc Ó Cathasaigh: These units, therefore, will be emergency accommodation
for Ukrainians until April 2026. We do not know exactly when, but this accommodation will
then have a 60-year lifespan after that time. At some point, therefore, these houses are going to
feature, in one way or another, in the market.
Mr. Ciaran O’Connor: Yes.
Deputy Marc Ó Cathasaigh: Is Mr. O’Connor telling me there is no market valuation of
these units?
Mr. Ciaran O’Connor: No, but—–
Deputy Marc Ó Cathasaigh: If we are trying to evaluate the value for money to the taxpayer, which is the job of this committee, I need to be able to stack up the cost of this accommodation to the State versus its worth to the State.
Mr. Ciaran O’Connor: I agree with that point, but I think we need to wind this scenario
back two steps. These two steps would bring us to the position concerning what kinds of sites
we got, which we mentioned already, and the scale of these sites. The most economical scale on
which to build houses involves around 200 to 300 units. We are building at a scale of perhaps
50 to 60 units. The biggest site we have has 108 units. There is, therefore, a complete difference in scale. These are also remote sites—–
Deputy Marc Ó Cathasaigh: I know, but I want to have a very simple understanding in
this regard. I am aware of individual sites. I know many of the sites offered to the OPW were,
you know, pig-in-a-poke stuff. The organisations concerned were wondering what they could
offer to the OPW. They did not really want these houses to be constructed on certain sites, so
the decision was taken to offer the OPW something on a floodplain, for example. I know all
these factors.
The very simple understanding I am hoping to get here, however, concerns the fact that it
is costing us roughly €350,000 to build each of these houses. I want to know what the current
market evaluation of each unit is, because these units will, at some point in time, and relatively
close in terms of the lifespans of these properties, become things traded on a market. I wish to
ask a very simple question around value for money. Have we any market evaluation of these
units? Is Mr. O’Connor giving me the long version of “I do not have a market valuation to tell
you, Deputy”?
Mr. Ciaran O’Connor: We do not. As I said, we did not value them in this way because we
had to operate in the context of the land and sites we were given. It was not really an appropriate measurement, then, to apply. I think the appropriate measurement would be whether we got
value for money in terms of what was built. I would take issue with the—–
Deputy Marc Ó Cathasaigh: How can I adjudicate on the question of the value for money
of what was built unless Mr. O’Connor can tell me, roughly, what it cost to build these units
and what value, approximately, they would realise if there was an attempt to trade them? I acknowledge all the provisos concerning the free market not necessarily being the greatest judge
of value and blah blah blah. How am I supposed to discharge my basic function here, in terms
of evaluating the value for money achieved for the taxpayers, when Mr. O’Connor cannot tell
me how much these units are worth?
Mr. Ciaran O’Connor: With respect, I think it is necessary to add in the right equation to
do this, and the right equation is—–
Deputy Marc Ó Cathasaigh: That is great. Mr. O’Connor is the specialist. Do the equation and give me an answer.
Mr. Ciaran O’Connor: It is not that simple. The closest one I can give the Deputy would
involve taking the example of the site at Backweston, which is just on the border with County
Kildare. We have constructed a two-storey unit. This is within 10% of a social house. It was
done based on only 12 houses being built. The big plus that has come out of this whole programme is that we have taken an embryonic industry and turned it into one that can now assist
in the provision of more housing.
Deputy Marc Ó Cathasaigh: Great. I subsidised the private sector. That is fantastic. I
am running out of time but I had questions around the fact that these units were developed in
conjunction with the Construction Industry Federation. When these are rapid-build units and
modern methods of construction are in use all over the world, why could we not find an off-thepeg solution to suit the sites we were using? We are not reinventing the wheel here. We are acting in the middle of a crisis. There were six months to do this. We were mandated to get going
on it in April but we did not get anywhere until October. There were six months where we—–
Mr. Ciaran O’Connor: With respect, no. The Deputy is incorrect. We got a Government
decision on 28 June. We had a contractor appointed on 4 July. On 27 September, we had subcontractors appointed and on 7 November, we began our first set of houses. That is at 40% of
the timeline that the same contractor, Sisk, was building houses in Ballyogan. We did it in less
than 40% of the time in which Sisk did it. To be fair, that is a reasonable outcome.
Deputy Marc Ó Cathasaigh: I want to talk about flood relief programmes. We get a narrative involving planning and judicial reviews. How many programmes are held up in judicial
reviews? Deputy O’Connor is not here now but the big flood that we had recently affected west
Waterford just as much as it did Midleton. People spoke about planning in the aftermath but as
I understand it, that flood relief scheme was not held up by planning. How many schemes are
in judicial reviews?
Mr. John Conlon: I will just ask my colleague, Mr. Casey, to answer that question.
Mr. Jim Casey: Approximately five flood relief schemes have been involved in judicial
reviews. They include the Morell river scheme, the Morrison’s Island project in Cork, the
Whitechurch scheme in south Dublin, the Poddle scheme in Dublin and the Blackpool scheme
in Cork.
Deputy Marc Ó Cathasaigh: I just wanted that information for background because I want
to talk about nature-based solutions and soft engineering. We are very late to the table on this.
The briefing documentation supplied to us the OPW says that the development of flood relief
schemes under the OPW’s capital programme now involves a specific requirement to assess the
potential for nature-based solutions as part of the overall solution to managing flood risk. Hard
engineering does one thing and in particular instances is very much needed. Waterford city is a
great example of hard engineering solutions that have provided a really good outcome in flood
mitigation and management. However, such solutions are very expensive. Since when has the
OPW begun meeting this specific requirement to assess for nature-based solutions?
Mr. John Conlon: Again, I will ask my colleague to take that question.
Mr. Jim Casey: In the past two to three years that has been a requirement.
Deputy Marc Ó Cathasaigh: How many flood relief schemes have within their planning
a significant component of soft engineering or nature-based solutions?
Mr. Jim Casey: We have currently about 100 active flood relief schemes being progressed.
About 80 of those are in the first stage of preliminary design. All 80 of the schemes that are
currently being designed would have nature-based solutions as a specific requirement of—–
Deputy Marc Ó Cathasaigh: How does the OPW do a cost-benefit analysis of naturebased or soft engineering solutions versus hard engineering solutions? This is a complicated
question in several parts. How does the OPW do the cost-benefit analysis? How does it do
the natural capital accounting, whereby the cost-benefit analysis takes account not just of flood
prevention but also biodiversity benefits, carbon sequestration benefits and so on? How does
the natural capital payoff from the work factor into the OPW’s equation when it is doing costbenefit analysis?
Mr. Jim Casey: In terms of cost-benefit analysis, we simply look at the cost of the scheme
relative to the benefit of it. The benefit of the scheme is largely about the protection of homes
and businesses and what damage would be prevented by implementing the scheme. That largely comes down to putting an economic value on that.
Deputy Marc Ó Cathasaigh: Is there any natural capital accounting element at all, whereby the OPW also includes the attendant benefits of biodiversity pay-off, carbon sequestration,
water attenuation within the landscape and so on?
Mr. Jim Casey: Yes. That is an area we are looking into at the moment.
Deputy Marc Ó Cathasaigh: The OPW is looking into it.
Mr. Jim Casey: It is not a very well established area because—–
Deputy Marc Ó Cathasaigh: There is very good work happening in Trinity College on it.
The OPW would not have to go far.
Mr. Jim Casey: I understand that and we do engage with Trinity College on this. We do
engage with the current research and the most up-to-date methodologies for undertaking economic evaluations.
Deputy Marc Ó Cathasaigh: Is the OPW talking to the people who are developing the
national biodiversity action plan, which is on a statutory footing and which would include provision for these types of metrics? Does the OPW have an eye to the nature restoration law? It is
on the rocks at the minute but there is a commitment from the Government to proceed on nature
restoration. Are these things factoring into the OPW’s equations?
Mr. Jim Casey: Yes, absolutely. We are doing all of that. We are engaging with the NPWS
on the nature restoration law. We also do a lot of engagement with the Department of Housing,
Planning and Local Government on the benefits for biodiversity and water quality.
Deputy Marc Ó Cathasaigh: We are still at a fairly embryonic stage in that. Is that what
Mr. Casey is telling me?
Mr. Jim Casey: No, I would say we are pretty much right up there at using the most up-todate research and knowledge in that area.
