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Departmental Offices

Dáil Éireann Debate, Tuesday - 17 November 2020

Tuesday, 17 November 2020

Questions (88)

Róisín Shortall

Question:

88. Deputy Róisín Shortall asked the Minister for Public Expenditure and Reform when the error on the part of the Office of Public Works, OPW, in calculating the rent for the Department of Health facility at Miesian Plaza was discovered; when the rental payment was revised; the reason for any gap between discovery and revision; the steps that will be taken to recoup the rent; the reason for delays in recouping the overpayment of €10 million; and if he will make a statement on the matter. [37048/20]

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Oral answers (13 contributions)

I wish to raise the issue of the exposure of the State to a potential overspend or overpayment of rent for a complex, Miesian Plaza on Baggot Street, which has been rented for use by a number of Departments, and the failure to date to recoup the over payment of rent. Perhaps the Minister of State could provide an update on exactly what action is being taken.

Miesian Plaza provides modern, efficient, headquarter office accommodation for the Departments of Health and Children, Equality, Disability, Integration and Youth, as well as ancillary accommodation for the Departments of Finance and Public Expenditure and Reform. At approximately 14,000 sq. m, Miesian Plaza is one of Dublin’s most significant Government accommodation locations and one of the first leadership in energy and environmental design, LEED, buildings in Ireland, which is a third-party verification system for green buildings meeting best international energy efficiency and environmental standards. Miesian Plaza provides modern, energy-efficient, fourth generation office space for almost 950 workstations. It has allowed the occupying Departments to move from a cellular working environment to one that is modern and collaborative.

The rent being paid by the OPW in respect of the offices at Block 1, Miesian Plaza, is in accordance with the terms of the lease and therefore has not been revised since the lease commenced. An ambiguity around the measurement standard used as a basis for the rent calculation at Miesian Plaza was first identified during the course of an internal OPW review and, subsequently, in an examination by the Comptroller and Auditor General of the lease process in early 2018. Since the issue was identified, the Commissioners of Public Works in Ireland have continued to engage with the landlord regarding the measurement standard applied. At the most recent meeting, the landlord requested some time to consider the matters discussed and undertook to revert to the OPW. It is expected that communication with the landlord will be ongoing to enable final resolution of any outstanding matters.

That response is quite unsatisfactory. The potential exposure for the State as a result of a mistake that was made in measuring the floor space at that complex is €10 million. The Minister of State indicated that this is one of the most significant developments, which it may be, but it is also one of the most expensive. It is utterly unacceptable to have a situation where a mistake was made, that this was identified by the Chief State Solicitor's office in 2016 and that the lease was subsequently signed in January 2017. That is very difficult to understand and we need an explanation for it. More than anything, we need to ensure that negotiations are being actively pursued in respect of this overpayment.

The Minister of State said that there was a meeting with the landlord and that this company was to come back to the State in January. Ten months later, this has not happened. What is the current state of the negotiations?

It is important to point out that we are dealing with a 25-year lease. From the very start, the OPW has said that a mistake was made. The OPW has never, to any degree, stated that it has not acknowledged that a mistake was made. It is important to put on the record of the House that the total amount in question of the difference, when calculated over a 25-year period, is €8.6 million. The VAT on top of that it would be €1.9 million. The OPW is anxious to point out that this is a 25-year lease. We estimate that the discussions we are having with the landlord would allow for an opportunity for recoupment to be made.

As Deputy Shortall pointed out, there continue to be discussions, the most recent having taken place with chairman of the OPW, and he referred to this at the meeting of the Committee of Public Accounts last week. Ongoing dialogue in this area will continue. I have spoken to the commissioners in respect of the matter. To be honest, it is not satisfactory and we do not accept that it is satisfactory. We have put new protocols in place within the Department to make sure that a subsequent error of this nature cannot happen again. I accept what Deputy Shortall said.

With all due respect, for the Minister of State to say that it is not satisfactory is quite an understatement in light of the amount of public money involved. The Minister of State indicated that the OPW has acknowledged the mistake. It had no choice but to acknowledge the mistake. The OPW made the mistake. I am concerned about the €10 million of taxpayers' money for which the Minister of State has responsibility. It is the case, as I understand it, that the developer is ten months late in responding to the request to renegotiate.

What is the current situation? Has there been any contact with the owner and landlord of that premises since last January? What recourse does the State now have if the landlord does not come back within a reasonable time? How does the Minister of State intend to safeguard that €10 million of taxpayers' money?

It is important to point out that the landlord has done nothing wrong here.

He has accepted the overpayment.

This was a mistake that was made on the State's side. The State has acknowledged that but it also acknowledges that this is a long-term lease and we are hopeful that, through negotiation, the liability to the State will be minimised. We have also acknowledged that it is a 25-year lease and there is no duty upon the landlord to come back to us at the moment. It is not a matter of negotiation. It is a matter of looking at this in the round of 25 years to see how we can come to an accommodation with our landlord. It is not in our interests or the landlord's interests not do that, given that the Government may very well have additional office accommodation requirements over the next while that will need to be facilitated. I am hopeful that through negotiation and over the 25-year period we are talking about, the maximum liability to the State as it currently stands, which is €8.6 million plus VAT of €1.9 million, can be reduced to a satisfactory amount. It is not satisfactory as it is and I am not here to make any excuses. The Chairman of the OPW has not done so either. We admit that there was a serious mistake here and we have put protocols in place to make sure it does not happen again. We cannot undo the mistake and I cannot say that the landlord has done anything wrong. He absolutely has not. This is a liability that accrues to the State and we are trying to make sure we minimise it through negotiation and dialogue.

That is shocking.

We must go back to Deputy Mairéad Farrell's question-----

I am sorry but Deputy Shortall said my response was shocking. My response was factual.

The Minister of State said he was hopeful. Being hopeful is not enough when €10 million is involved.

Deputy, please. The Minister of State has responded and that is it. As we missed Deputy Mairéad Farrell's Question No. 87, we will now go back to it.

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