The Social Housing Public Private Partnership (PPP) Programme consists of 3 Bundles of sites that will deliver in the region of 1,500 social homes and there are robust governance arrangements in place to oversee implementation. Securing value for money (VfM) is an overarching consideration throughout the PPP procurement process and the Central PPP Unit in the Department of Public Expenditure and Reform (DPER) provides guidance in relation to PPP projects to achieve this objective.
The estimated full value of Bundle 1 and Bundle 2 of the Social Housing PPP contracts in nominal terms is €301 million and €253 million respectively (both figures are exclusive of VAT and include a forecast of inflation). The duration of both contracts is the construction period plus a 25-year operating period. This PPP Programme is being delivered through the ‘availability’-based PPP model. Under this type of contract, the PPP project company, as the private partner, designs, builds, finances and maintains public buildings on sites provided by the State, in this case through the local authority. Payment is made by the State only once construction of the buildings is complete and the units are ready to house tenants. The payment comprises a monthly ‘availability’ and performance-based payment (or unitary charge) made over the term of the 25-year contract, which incorporates all costs under the contract, including construction, the upkeep and maintenance of the developments, tenancy management services, financing costs and inflation.
The upkeep and maintenance applies to the whole development and not just the individual houses, including external roadways, drainage systems, green areas and landscaping, playgrounds, and community facilities (where provided). The planned preventative maintenance regime includes life-cycling of key building components (e.g. heating systems) over the 25 years, including that necessary to meet the residual life handback requirements at the end of the 25 year period. The tenancy management service includes the administration of the tenancy agreement and collection of rent on behalf of the Local Authorities as landlord, void management and tenant allocations, operation of a helpdesk for tenants and support of community development.
To date, €4.535 million has been paid by my Department in respect of the unitary charges for Bundle 1; there have been no unitary charge payments to date by my Department in respect of Bundle 2. In accordance with the relevant project agreement, Dublin City Council as the Lead Authority for Bundle 1 pays these costs directly to the Bundle 1 consortium Comhar Housing. A breakdown of the Bundle 1 unitary charge payments to date are detailed in the table
below:
|
Item
|
Amount
|
|
Construction Costs
|
€1,805,862
|
|
Lifecycle Costs
|
€442,424
|
|
Operating & Maintenance Costs
|
€2,041,504
|
|
Total Costs Invoiced (excl VAT)
|
€4,289,790
|
|
|
|
|
VAT*
|
€245,360
|
|
|
|
|
Total Unitary Charges Paid
|
€4,535,150
|
|
|
|
|
|
*VAT rates applied at 0%, 13.5%, 21% and 23%, as appropriate, and where VAT was applied on a reverse charge basis, this was paid directly to the Revenue Commissionsers by Dublin City Council and recouped by my Department.
|
My Department and the National Development Finance Agency (NDFA) are currently working with the relevant Local Authorities including Dublin City Council as Lead Authority to progress the third bundle of sites in this PPP programme. Design development for the project is underway and the statutory consent process is expected to commence in Q3 2021.
The Public Sector Benchmark (PSB) is an essential part of any PPP project. It contains commercially sensitive information in relation to the methodology used for costing public sector projects and for the pricing of risks by public sector bodies. In accordance with DPER guidelines (Guidelines for the use of Public Private Partnerships), the final PSB, or any elements thereof, is not made public during the tendering process nor where it is intended to procure further similar projects in the near future (e.g. subsequent project bundles as part of an ongoing PPP programme). As Bundle 3 will follow the same structure as Bundles 1 and 2 and given the potential impact on value for money for the State, it is not appropriate to release the PSB for Bundles 1 and 2 at this time.
However, and in accordance with DPER guidelines, once an appropriate period of time has elapsed and the commercial sensitivity of the information on the project is no longer an issue (having regard also to any other similar PPP projects which may be in pre-procurement), the PSB should be made public. The Department will follow these guidelines in relation to the social housing PPP programme.
