St Michael’s Estate appeal to Minister Gormley to step in and sort out PPP Regeneration Mess

dublin | housing | press release Thursday May 29, 2008 12:10 by Rita Fagan and Dr John Bissett 087 9889132/087 6319004

Residents of St Michael’s Estate appealed today to John Gormley, Minister for the Environment, Heritage and Local Government, to step in and sort out the PPP regeneration mess left behind by Dublin City Council and McNamara after the collapse of five PPP Regeneration Projects.

Appealing to the Minister Rita Fagan, St Michael’s Estate Regeneration Team said “We need action fast. There is confusing and contradictory information coming from McNamara and Dublin City Council. We are talking about people’s homes and life quality here, not just some buildings. We are in undated with residents looking for factual information. Is there a new plan? Have we to spend years negotiating a new plan again? McNamara said the PPP regeneration plan is not viable then why is he coming back with another agreement? What is the second bidder saying? We are all confused as there is conflicting reports emerging that are unsettling St Michael’s community”. Rita went on to say “The Minister needs to get in to the driving seat and sort this out. It has taken nearly 10 years to get this far, that’s a lot of blood, sweat and tears yet there isn’t one brick laid”.

Dublin City Council issued a press release 19th May stating that five PPP regeneration plans, including St Michael’s Estate would not go ahead as planned. On the same day the Regeneration Board instructed Dublin City council to approach the second bidder involved in the tendering process. On Morning Ireland radio programme Dublin City Council said they were seeking new options including talking to the second bidder. However in a press release/minutes of meeting on the 26th May Dublin City Council claim they are waiting on McNamara to come back with new proposals by today, Thursday 29th May and hopefully there will be an agreement signed by the following Friday.

Dr. John Bissett, author of a forthcoming book Regeneration, Public Good or Private Profit and Member of St Michaels Regeneration Team said, “We want to make our position clear to all especially the Minister, we have worked hard and have come up with an excellent regeneration plan for St Michael’s and we will settle for nothing less than the full development of the 14 acre site as agreed”.

St Michael’s Estate Regeneration Team, made up of residents and local community groups from St Michael’s Estate and the Inchicore area work with and on behalf of the residents in the regeneration process since 2001. For more information check out www.stmichaelsestate.ie

Ends

Contact: Dr John Bissett, St Michael’s Estate Regeneration Team - 087 9889132
Rita Fagan, St Michael’s Estate Regeneration Team - 087 6319004

…/
Background Information on St Michael’s Estate PPP Regeneration Plan

Agreed PPP Regeneration Plan for St Michael’s Estate 2008
The agreed PPP Regeneration plan includes the physical and social regeneration of the 14 acre site at St Michael’s Estate which include 720 dwellings (165 social, 75 affordable, 480 private) with a civic centre with library, parish centre, three crèches, youth centre, family resource centre, healthcare centre, two football pitches, play areas, new urban square, village green and public square. There is also an agreed figure of between 6 & 9 million for social agenda initiatives in the following areas community health & well-being, education & training, childcare, employment, cultural life (including arts and heritage), quality of life & community safety, sports and recreation.

Major Events from PPP Tendering Process to Present
Jun 05: Tender went out for the development of 14 acre site at St Michael’s Estate.
Dec 06: Planning given for 4 acre site, Phase 1 of 14 acres.
Jan 07: McNamara is informed he is the preferred bidder on 14 acres. Negotiation begins. In practice we are still in talks in 2008. Competition is still live as McNamara did not sign PPP agreement to date.
Jun 07: St Michael’s Estate Design Group and Regeneration Board agree that new guidelines don’t effect signing of agreement as the developer must comply with them and a quantifiable amount of money will go against any amount of units that may be lost due to variations.
Aug 07: McNamara is given preferred design and ideas by Regeneration Board and information on 51 outstanding issues.
Nov/Dec 07: A general commitment is given by McNamara to sort 51 issues. He has written to Dublin City Council with general responses and no details.
Jan 08: Regeneration Board decides to take McNamara’s general commitment in good faith to speed up the process of signing the agreement. Agreement is signed off by Regeneration Board. Regeneration Board instructs Dublin City Council to get the Project Agreement assigned.
Jan to Apr 08: McNamara continuously comes back with new issues. The main four issues are:
1) New regulations increasing apartment sizes : McNamara estimates he may loose 31 apartments due to size increase. Regeneration Board agrees he will be compensated in full for any housing units lost (estimate figure of €6.3 million). It is also agreed that he will be compensated for the loss of general build space of 2,876 square metres at a rate of 1,634 euros a square metre. This adds up to 4.7 million euros.
2) New energy efficiency regulations: Community groups and residents insist on the highest possible energy standards in the new homes and facilities. Updated regulations are outlined in tendering process. Costs are agreed for phase one (four acre site) energy amendments, and the Regeneration Board agrees he will be compensated in full for any changes in phase two.
3) Inflation and interest increase costs: Regeneration Board agreed compensation of €1 million for interest rate increase costs as safeguarded by the PPP model.
4) Soil quality: There is damage to part of soil. McNamara claims compensation. Regeneration Board point out that it s clearly laid out in the tendering process that bidders are responsible for any work that needs to be done with the soil due to soil contamination.
Apr 08: Regeneration Board gives McNamara/Castlethorn one month to sign the Project Agreement.
May 08: Still no agreement signed or any attempted at signing by McNamara.
May 08: Regeneration Board issue signing agreement date to McNamara for 9th May. He still does not sign.
May 19th Dublin City Council issue press release to national media under the head line Dublin City Council Looks For New Options To Fund Regeneration Projects Following Announcement That McNamara Construction Are Not To Proceed With Public Private Partnership.
Dublin City Council then announce to the Regeneration Board that PPP plan for St Michael’s and four other PPP projects will not go ahead with Castlethorn/ McNamara. Board is informed of letter received by Ciaran McNamara, Assistant City Manager, Dublin City Council, dated 19th May and signed by Bernard McNamara. Letter claims that the current private housing market along with increased apartment size, new energy regulations and a balancing site purchase figure have made the whole concept of PPP to fund social and affordable houses and community services unsustainable in the current market. It also stated that the Project Agreement was not signed and that Dublin City Council were looking at new options.
May 20th Ciaran McNamara, Assistant City Manager, Dublin City Council states on Morning Ireland Radio show that they will talk to the second bidder about the Regeneration of St Michael’s Estate.
May 25th Bernard McNamara takes part in the Marion Finucane Sunday Morning Show RTE and explains his reasons for the collapse of the €900 million public-private partnership housing projects he had committed to build with Dublin City Council. He claims he hasn’t pulled out of the PPP projects. He sights new regulations in apartment size & energy efficiency along with bureaucracy and the “difficult” house market as rendering projects not viable. He states that DCC have told him they have spent €27m to date on the PPP projects. (This is later refuted by Ciaran Mc Namara of DCC)
May 26th Protest organised by O’ Deveney Gardens. St Michaels’ Estate joins forces with O’Devaney Gardens, Dominick Street, and Tenants First in a major protest outside City Hall.
May 26th Dublin City Council (DCC) meeting is held. DCC issue press release with headline Top Builder May be Sued over House Plan Collapse (Irish Independent). DCC Consider taking action against McNamara. Council refutes figure of €27m stating the figure is closer to €6m on all projects. Council stated there is no legal obligation upon the developer where an agreement hadn’t been signed such as the case of St Michael’s Estate and Dominick Street. Ciaran McNamara, Assistant City Manager said that McNamara Bernard McNamara would be submitting new plans by next Thursday 29th May and they would be responding by Friday week.
May 28th St Michael’s Regeneration Team state they want the agreed PPP Regeneration plan which includes the physical and social regeneration of the 14 acre site for St Michael’s Estate. They have already had three regeneration plans scraped to date and want the agreed plan to proceed as soon as possible. They clarify information for residents.

Important notes on PPP Model
-Department of Environment and Dublin City Council failed to put in any time frame for the conclusion of contract negotiations.
-In the PPP model the developer is protected with safeguards on variations to the agreements. There is a provision (Payment Adjustment Mechanism) for Dublin City Council to require the developer to make alterations or variations to the design and construction requirements and there is a set procedure under which this can be done.
-Major problem with PPP is that the process is not open, transparent, accountable and efficient. You can not get insider information for e.g. Why was McNamara chosen over other bidders?. What did his tender offer that other bidders didn’t. Was it a realistic tender? Was it the best tender? What time frames were projects to be completed? Why does Dublin City Council continue to chose a developer as suitable for PPP despite the fact that they have not delivered one single brick on any other PPP projects to date?
-The PPP contract is not available to the public. It lies with the Department of the Environment.
-It is the Project Board which is set up under P.P.P. legislation who is responsible for monitoring the progress and implementation of the regeneration projects. The Department of the Environment is the sanctioning authority and they have two members who sit on the Board. Dublin City Council is the lead agency and has two members on the board and chair the proceedings. The N.D.F.A. sit on the Board and keep an eye on the procurement process from a finical and value of money point of view. The Project Board must sign off the Project Agreement.

For more information please visit our website www.stmichaelsestate.ie