Dáil Éireann Debate, Wednesday - 21 April 2021
48. Deputy Róisín Shortall asked the Minister for Public Expenditure and Reform the status of the recoupment of the €10 million overpayment of rent for the Miesian Plaza; the specific engagement that has taken place with the landlord; the details of the way in which that overpayment will be repaid; and if he will make a statement on the matter. [20812/21]
View answerI want to raise again the building in the Miesian Plaza, Baggot Street, that houses three Departments. An error that was made by the Office of Public Works, OPW, in measuring that building has resulted in an overpayment of rent of approximately €344,000 per year, amounting to an estimated total overpayment of €10 million over the lifetime of the lease. What progress has been made in addressing this issue and recouping the overpayment?
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 as set out. However, the OPW has acknowledged that an error occurred and that it should have engaged with the landlord and sought to recalibrate the rental rate as a result of the new measurement standard, international property management standard 3, IPMS 3, introduced in early 2016. The error should not have happened and from my discussions with the Commissioners of the OPW, I know they very much regret that it did. I reiterate that regret this evening on behalf of the OPW.
The annual rent associated with the additional area under IPMS 3 is €279,827 plus VAT. The impact to date is in the region of €1.2 million plus VAT and, if the situation continues unabated, the impact over the 25 years of the lease could amount to between €7.7 million and €8.6 million plus VAT, depending on the rate of inflation. The OPW processes have been reviewed and strengthened to ensure such a situation does not arise again. Approval arrangements now include an independent verification of heads of terms agreed on leasehold or freehold acquisitions to ensure alignment between those heads of terms and the final legal documentation.
Since the issue was identified, the commissioners have continued to engage with the landlord on the measurement standard applied. A number of meetings and discussions have already taken place and the landlord has again recently confirmed that he wishes to constructively engage with the OPW on the measurement issue, with a view to reaching a solution that is acceptable to both parties. The OPW and the landlord agree that the best way to progress the discussions is through further face-to-face meetings, which will be arranged once it is permissible under Covid-19 restrictions and it is safe for all to attend.
I am afraid the Minister of State's response does not align with what has been reported in recent weeks on this ongoing matter. It is one thing for the OPW to regret the mistake it made but what the public wants is for it to recoup the public money that has gone to the overpayment and ensure it does not continue. When I raised this matter with the Minister of State six months ago, he told me there would be ongoing dialogue. There does not seem to have been any dialogue at all since last November.
Thanks to Cianan Brennan of the Irish Examiner, we know that, on 1 April, the landlord in question, Larry Goodman, trading as Remley Developments, put a notice in The Irish Times denying that the OPW had ever communicated to Remley Developments that there was an issue with measurements at Miesian Plaza and stating that no downward adjustment to the rent was discussed or negotiated. What is the truth of the matter? Has the issue at hand been conveyed to the landlord? I understand there was to be a meeting last month. When can we expect real dialogue to take place?
As I said the last time this matter was raised in the House, it is important to point out that I am not in any way condoning what happened in this matter. This was an error and it is not to my acceptance or that of the OPW. We want to remedy it and make sure we move forward with as good a relationship as possible with the landlord. To that end, I have met the Chairman of the Office of Public Works on a number of occasions to see how we can best move forward on this issue. The best available route to do so is, as the Chairman has committed to do today, to have a face-to-face meeting, at the earliest possible opportunity, between the landlord and the Commissioners of the OPW. Covid restrictions allowing, that will happen as quickly as possible. In recent correspondence, which has been publicly enunciated through the medium of a "Prime Time" programme, of which I am sure the Deputy is aware, the landlord stated that he is anxious that the situation be ameliorated. The OPW will work constructively with the landlord on that basis.
Putting an advertisement in the newspaper does not sound like being serious about proper dialogue. We all know the constraints arising out of the Covid restrictions but they do not preclude a meeting from taking place with a small number of people in a large room. Can the Minister of State give an undertaking that this meeting will take place within the next month? That is reasonable. It is more than three years since the OPW and the Comptroller and Auditor General established that an error was made. The error in the overpayment is continuing all the time. I am asking the Minister of State to take action to address this matter. We cannot afford to waste any more time. Will he give a commitment that a face-to-face meeting will be set up with the next month?
I can give the Deputy a commitment and I have already taken action, in that I have already, on numerous occasions, met the Chairman and Commissioners of the OPW specifically on this issue. Neither the Chairman nor I want the matter hanging over the OPW as an organisation. It is an isolated issue. It is important to point out that the Office of Public Works is a competent organisation that deals with leases valued in excess of €100 million for the benefit of the Civil Service and public service across a range of agencies.
When will the meeting take place?
I did not interrupt the Deputy and I ask that she not try to shout me down. As I said, this is an isolated issue.
I am confident, as the Minister of State with responsibility for the OPW, having come in to the organisation last July and having reviewed the work, that the OPW is a modern, progressive and fit for purpose organisation. This is an issue but I am dealing with it. The commissioners and the chairman are dealing with it. I have given a commitment to the House. The landlord has given an opportunity. I cannot tell the House when the acting chief medical officer will allow face-to-face meetings, but when that happens I will be back to the Deputy with a reply as soon as possible.
