Pyrite Resolution Board: Chairperson Designate

We are now in public session. I welcome Mr. Jack Keyes, chairman designate of the Pyrite Resolution Board. The purpose of this morning's session is to engage with him on his strategic priorities for the role and his views of the challenges currently facing the board. The committee welcomes the opportunity to meet with the chairperson designate in public session to hear his views. We trust this serves to provide greater transparency to the process of appointments to our State boards and bodies.

I draw the attention of the witness to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

I call on Mr. Keyes to make his opening statement.

Mr. Jack Keyes

I thank the Chairman and members of the joint committee. It is a great privilege for me to be invited to appear today. I am grateful for the opportunity to speak about myself, in the sense of my experience and qualifications, as well as the Pyrite Resolution Board, which I hope to serve as chair. I will try to answer the committee's questions as comprehensively as I can.

I have spent most of my career working at senior level in local government, including working as Cavan county manager for ten years from 2004 to 2014. Before that, I was with Offaly County Council and Dublin City Council as director of services and senior executive engineer level. I worked in all service areas, including housing in particular, where we constructed quite a number of houses during a period when local government did construct a lot of houses.

The first decade of my career was in the private sector as a consulting engineer in large practices in Dublin. That is particularly relevant in that I understand the mentality of consultants and also managed a lot of contractors in that time. I hold an honours degree in civil engineering from University College Dublin and have postgraduate qualifications in accountancy, personnel management, public management and leadership. I am a chartered engineer and a fellow of Engineers Ireland.

For the past three years, since I finished in Cavan, I have worked in leadership development, strategic planning, organisational development and project management with a variety of bodies and boards in the public, private and voluntary sectors. I am currently chair of several boards and committees including the national rural water services committee, which oversees the whole rural water area, and the national rural water expert group, which allocates the finances. I was recently chair of the boundary review committees for Athlone and Drogheda. All of these appointments were made by the Government.

I currently chair a number of other bodies, including Cavan Sport and Leisure Company Limited, a private company running facilities in Cavan, and Cavan Institute, a post-second level institute with 1,400 students. That appointment comes to an end in September I was chairman of Cavan County Enterprise Board from 2004 to 2014. I serve on the board of the National Library of Ireland and chair its readers' advisory committee, which liaises with the people who use the library. My academic work includes lecturing in leadership and strategic planning in the Institute of Public Administration at levels 9 and 10.

When I was county manager in Cavan, I focused on strengthening governance processes and oversaw the establishment of the council's first audit committee. I drew up its risk register and achieved high levels of compliance in all Government and EU audits. In addressing challenging societal issues, in which I am particularly interested, I achieved a balance, I hope, between facilitating the voice and catering for the needs of citizens - including those in challenging situations - on the one hand and achieving value for money for the State on the other. By focusing on results and processes, successful outcomes were achieved in many areas and Cavan became an award-winning county in many fields. My principal focus at undergraduate and postgraduate engineering level was on soil mechanics, a topic very relevant to this post, including dealing with challenging ground conditions. I understand the construction industry and all its facets and diverse players.

The Pyrite Resolution Act 2013 sets out the respective functions of the Pyrite Resolution Board, PRB, and the Housing Agency. The Act mandated the PRB to draw up a scheme for the remediation of significant pyritic damage to dwellings, to accept applications from affected homeowners and to direct and oversee the implementation of a pyrite remediation programme. The pyrite remediation scheme sets out the conditions that must be satisfied to qualify for remediation under the scheme.

The Pyrite Resolution Board was established by the then Minister for the Environment, Community and Local Government following the commencement of the Pyrite Resolution Act 2013 on 10 January 2014. The pyrite remediation scheme was made by the board on 12 February 2014 and amended on 5 February 2015. This scheme constitutes the framework for the application of the provisions contained in the Act and first came into operation on 13 February 2014. Its mission statement is "to procure the remediation of certain dwellings with damage caused by pyritic heave of hardcore under floor slabs in a fair, efficient, transparent and cost effective manner." The committee may be familiar with the terms. The hardcore is the stone underneath the slabs in a house; it expands and causes these horrific cracks to occur.

The PRB must be acutely conscious of the need to ensure that the expenditure of public funds is managed carefully, consistent with achieving the scheme’s objectives. To ensure value for money, framework panels have been set up for building professionals and building contractors following open tendering procedures and contracts for individual projects are subject to further tendering from these panels. Exchequer funding provided for pyrite remediation purposes is routed through the Housing Agency and the audited financial statements pertaining to such funds are contained in the Housing Agency’s annual report. There is a partnership approach with the Housing Agency.

The original geographical scope of the scheme was limited to the areas identified in the pyrite panel report of June 2012, namely, the counties of Meath, Kildare and Offaly and the administrative areas of Fingal County Council and Dublin City Council. The majority of the cases were in Fingal and the second highest concentration was in Meath. However, during 2014, reports were received of pyritic heave in a number of houses in two estates in the administrative areas area of South Dublin and Dún Laoghaire-Rathdown county councils. On investigation, the Pyrite Resolution Board was satisfied that damage attributable to pyritic heave was present in dwellings in those developments and recommended an amendment of the scheme to include those areas.

The process works as follows: the Pyrite Resolution Board accepts and validates applications under the scheme and oversees the implementation of the pyrite remediation programme for approved dwellings. The scale of the programme is determined by the availability of funding and other factors. The Housing Agency, subject to the direction of the PRB, remediates approved dwellings affected by pyrite and implements the pyrite remediation scheme. The Housing Agency also assesses and makes recommendations to the PRB on applications from homeowners for inclusion in the scheme. An audit and risk committee assists the board in fulfilling its oversight responsibilities and operates to the board’s approved terms of reference. The committee meets quarterly, comprising of a chairman, five board members and one external member with experience in financial accounting. The board's tasks include overseeing the process I have just described, and ensuring that a robust risk management system is in place.

The funding of pyrite remediation works is from voted Exchequer expenditure, allocated by the Department of Housing, Planning, Community and Local Government. The PRB approves expenditure profiles by the Housing Agency in respect of costs, commitments and expenses to the householders. In 2016, expenditure on the pyrite remediation programme amounted to almost €27 million, a very significant sum.

The status of applications at the end of June 2017 are as follows: the total number of applications that have come in is 1,798. The number of dwellings under remediation at the moment is 127. There is a scheme set up whereby a stream of things is happening. There are about eight stages in the process. That would be a typical number. Included in the scheme so far we have 1,309 dwellings. The difference between the 1,798 total applications and the 1,309 is that a number are awaiting validation. The number of closed cases is 109, which were not approved for various, mainly administrative reasons. I can give the committee further details on those cases if members are interested.

Looking ahead at the next three years, the challenge will be to maintain the progress. We currently have something that is working quite well but it would need to be assessed and perhaps improved as time goes on. We want to complete the requisite number of repairs. The need to deal with applicants fairly, with empathy, objectively and consistently and in accordance with legislation will underpin the work of the board, as it has to date.

Comprehensive oversight of the complex processes involved in inviting and initially assessing applications, overseeing the work of expert consultants and contractors, focusing on minimising disruption to the families involved and delivering value for money will demand that the board performs its functions efficiently and effectively. If it happens, a family will leave the house for a 12-week period and expenses will be paid for board. It is a huge disruption to the family to have mini-JCBs in their living room digging up the floor. An ever-increasing emphasis on corporate governance will result in ongoing significant focus on this area.

I hope I have demonstrated to the committee that I have the expertise and corporate governance experience to chair the Pyrite Resolution Board. I thank the members for their attention to this matter and I am very pleased to answer any questions they may have.

I thank Mr. Keyes for his statement. He is a very busy man and I am beginning to wonder how he fits everything in.

Reference was made to everything depending on funding. Total applications are shown in the statement as numbering 1,798 and the number of dwellings currently being worked on is 127. This is a huge gap between the figures. What is the procedure and how does the board decide who is going to get the work done first? Will everyone who applies and who is told they qualify get the funding? What role is played by the local authority in this regard and will Mr. Keyes inform the committee if the board works with local authorities? It is a very good report and maybe Mr. Keyes could fill me in with some answers to those queries.

I thank Mr. Keyes for his presentation. By the looks of it Mr. Keyes' qualifications are very strong. I did not know if Mr. Keyes had another job apart from all the different roles he has. There is a lot there and chairing all of these committees and so on would be very challenging.

I am curious about a number of aspects. Are there any plans for the Pyrite Resolution Board to look at the mica issue? This has been a concern, especially in the Donegal area. We need to look at whether the board's remit can be expanded. Time without number we have been refused by the Department in trying to deal with this major issue. Perhaps Mr. Keyes could fill the committee in on that.

A lot of the pyrite problems were mainly confined to the more northern region of the State and we can clearly define those areas. Is there a plan to expand on those areas? Outside of those regions we are discovering that pyrite issues are also to be found in the west and a small number of other areas. I have visited many of the sites and it is a traumatic matter for anyone to have to deal with. Even though it is roughly a two to three month period while they are out of their homes, it is very challenging for many people.

We speak of the subject in terms of private houses, but there are also many local authority tenants dealing with the same problem, who could number more than those we are currently discussing. In my area Ballymun, Finglas, Swords and Ashbourne present major problems in this regard. Will the Pyrite Resolution Board have a role in dealing with public housing? How will it interact with those people?

I am not sure if Mr. Keyes' role as the chairman of the board, if he is appointed to it, will be a paid role. I assume he can tell the committee if it is a paid role. I have found that one of the biggest factors for affected people when it came to the whole process was the procuring engineers and also the associated the costs. They found it very difficult and some people had to pay between €2,000 and €5,000. It was very messy. Maybe this process could be looked at to see if it could better help people. From speaking with people who have been affected this aspect was really getting to them.

When we look at the amount that has been remediated since the board was set up, I believe we have been a bit slow. The flagging process means that the lesser affected houses have been left behind to deteriorate as time goes on. This needs to be looked at also to see if the process can be speeded up.

Mr. Keyes appears to be eminently qualified. I echo Senator O'Connor's remark that that Mr. Keyes seems to be a very busy man indeed. As part of the new role - if I can be presumptuous - are there plans to assist people practically who have, for example, grade one pyrite in their homes? I have looked at this issue and I have been in contact with a lot of families in Lusk and Rush especially. They have grade one pyrite and we can see that in many instances it can lead to grade two and to remediation being necessary. Would Mr. Keyes see the board as having a role in communicating with those people? Currently they are feeling a bit lost. They know they have some pyrite but not quite enough to be as bad as their neighbours, for example, who may be getting remediated. Their houses have not enough pyrite for remediation but these people can see that it is going to go in that direction. I am interested to hear Mr. Keyes' views on that.

Consider the case where there are three or four houses in a row in a terrace and the first, second and fourth houses are owner occupied but the third is rented. The first, second and fourth houses are being remediated but for some reason the third is not. Would the Pyrite Resolution Board have a role in communicating with the house in the middle? The people on either side would get their dwellings remediated and they fear that the person in the middle would not. In the context of Mr. Keyes' role as chairman of the board, does he believe that there could be more communication? People feel they have been left out of the loop and that the board has not been very proactive. People affected by pyrite feel that those involved in the process have not been very approachable and that there has been insufficient action in this regard.

I will now turn to the issue of the engineers, which deeply concerns me. It is, of course, necessary to get an engineer's report. Constituents have told me that where they have initially engaged an engineer the cost was €1,800 to €2,000. When it becomes apparent that there is more business the costs then go up. People were paying under €2,000 at the beginning of the process but at the end, when the entire housing estate is looking for engineers, they found the price was going up. Would Mr. Keyes have a view on whether he would seek powers or have powers to help those in that situation? They must get the engineer's report because they must find out the extent of any damage. At the back of all of this are people who bought their houses in good faith and who, like me or anyone else, would not be able to tell that there was a problem on the day they walked in to their houses. They could not have known and it is not their fault but unfortunately, they are left with the consequences. I appreciate that funding is important but there are many people who find themselves in a limbo in this respect and who would like to see the chairman and the board reaching out to them to try to bring them into the process a little more. They currently do not feel part of it.

I will come back to Mr. Keyes now and then return to members for another round of questions.

Mr. Jack Keyes

I thank the Vice Chairman and the members for their comprehensive questions.

Although I have studied the workings of the board and the reports as best I can, members will appreciate I am on a learning curve because I am just going into the job. I would not claim to have comprehensive answers to many of the questions. I will answer with the knowledge I have and will be more than happy to come back at any time if the committee wants an update on the workings of the board. In respect of being busy, I do not have any big job. While I was in the job of county manager, that was very full time. For the past few years I have been working on the boundary committees, which became a very demanding task in that there were 28,000 submissions in Roscommon which for government in Ireland was an incredible figure. Each had to be processed and considered. That was a massive task that ended last autumn. My role in Cavan Institute is also demanding because the college is very important to the area. That will finish in the autumn. With those two big jobs ended I am confident I will have time for this work.

At the start of the scheme there were 1,798 units and by now 1,309 are either completed or included in the scheme. There is not a large number waiting. The ones that are waiting are going through the stream of eight stages, apart from the 101 that have been rejected to date. In June, for example, 37 applications came in. There has been a constant flow for the past two years. Although there is a bit of a gap it is not significant from what I have seen but I will not really know until I get in there. The flow in is almost equivalent to what is being remediated and processed.

Is there a constant flow of funding? Does the board have to apply to the Department?

Mr. Jack Keyes

It is like any allocation, the Department gives us a yearly allocation and we are free to go in and look for extra funding during the year.

It was not meant to be like that. There was meant to be much more money.

Mr. Jack Keyes

As for local authorities, there is very little contact. It is a separate process from theirs. It is for private houses only, not local authority housing. The Act drives the work of the board.

Mica in the north west is a separate process. It is not covered by the board.

I was suggesting that Mr. Keyes try to have it examined because it has been dragging on.

Mr. Jack Keyes

At present, the brief of the board does not include mica.

I was interested in Deputy O'Reilly's feedback about the cost of the engineer. My understanding is that €500 is allowed for the initial survey if a house is accepted on the scheme. The engineers employed to do the detailed contract documents are from a panel and they are paid fully by the moneys provided by the board or the State. If one is not accepted on the scheme one is eligible for those fees. I will keep in mind what the Deputy says about the fee of €1,800 and try to tease it out.

It is a real concern for people, the cost and the trauma.

Mr. Jack Keyes

We are all focused on the trauma. It must be an incredible experience for people, especially when they are in their first house. That brings me back to the point about the rented house in the middle of a terrace. I was not aware that might be the case. There is a policy to make an effort to do all the houses in a terrace at the same time. I will see about that.

The word, "communication" came up in several questions here. It is of the essence. I will at an early stage look into how the communication is going and whether it can be improved. People deserve to be communicated with comprehensively. If that has not been satisfactory to date and I am not saying it is not, we will certainly address it.

My understanding is that the present scheme is predicated on dealing with grade two defects. There is a category called "grade one with progression". I cannot give any more answers on that now but I will focus on it at an early stage, to see what is the situation and whether something can be done or if it is necessary. At the moment the building has to be at grade two.

I think I have answered everything. Forgive me if I have forgotten anything.

I thank Mr. Keyes for coming along today. I come from the pyrite capital of the country and am very interested in whoever runs the board. Most pyrite has occurred in Fingal because of the quarries located there. There are three or four estates in Mulhuddart, where I live, within a proximity of 100 m, that are riddled with pyrite, including my estate.

I first became aware of this problem in 2008 or 2009. The first public meeting was held on the night of the big snowfall in November 2009. We advertised a public meeting in the estate to know whether pyrite was the problem people were experiencing. When snow falls in Ireland the country shuts down but 50 people came, even though they thought the meeting was going to be cancelled. Even within our estate of Castlecurragh, 38 houses were fixed. Houses all around me are being fixed. The problem raised of one house here or there is happening everywhere because there is no advertising campaign by the Pyrite Resolution Board, something I requested several years ago, to explain to people what pyrite is and the need to apply quickly. I went to see the builder last summer. He was working on a whole block because it happened that everyone there had applied. It was the only block where everyone had applied. Some people are still not aware of this problem. That builder said it is bad practice for him to come in to fix one house and fix the house next door a year later. That is ludicrous. He could lift up all the houses for much less if the State was serious about this and not just about saving money initially. The work could be done so much more cheaply.

It is fine that the individuals have to get their own reports but there is no attempt to advise people. People in my estate still do not know. That is something Mr. Keyes needs to consider. I do not know why there is no explanation of the process on television or social media rather than people being obliged to approach their Deputies. I think that is why the board is getting 30 applications a month. In the report we received in advance of the meeting we were told that since the board was set up there have been 1,494 applications in total. That is a drop in the ocean. There are 700 units in my estate. I am not saying they all have pyrite but 100 or 200 might. There was a single application from 31 developments. There is hardly only one house in those estates with pyrite. The board needs to address the advertising immediately. Some people are attempting to conceal the fact that there is pyrite in their estate.

I understand that, but it is in no one's interest. What is in everyone's interest is that this gets fixed. It took seven years of campaigning by communities, in respect of which the Pyrite Action Group should get a great deal of credit.

The fund was initially to have been €50 million a year and a levy was to be placed on the construction sector to pay for it. The CIF and the insurance sector threatened constitutional challenges and, quietly, the then Minister, Mr. Phil Hogan, dropped the levy. Generally speaking, it has been €10 million annually as a result although I see there was more last year as, perhaps, more people have become aware. There is meant to be €50 million, however. We could get all of the pyrite fixed if the fund was put in place and advertised. That would get this done quickly rather than via the piecemeal approach being taken.

The issue of stage one and stage two pyrite is really important. For example, I live in an estate where there is pyrite. I have some pyrite but it is not enough to get it fixed. While it is not causing me a problem, people who want to sell their houses are stuck in this incredibly difficult situation. It is not the case, as might have been said earlier, that every case will develop. It is very unlikely because the estate is 15 years old and usually it develops within ten years, albeit it is not ruled out that it might take more time. Having been to so many houses, I am nearly an expert on it and that is what I have been told. People like me and other residents who have contacted me, like the woman who was on "Morning Ireland" a couple of weeks ago, are in a difficult situation in that they may have had amber certification. They do not have enough pyrite to get it fixed but they can also not sell their houses. While that is fine if they want to rent out the houses, people have to move on. Not everyone wants to be a landlord.

This is now the biggest issue facing the pyrite board. Where there is enough to get it fixed, that is fine. It will be fixed. However, I am now worried about all of the other people who do not have enough to get it fixed. We have to move on and start addressing that issue. Does Mr. Keyes have any solutions for those people? Mr. Keyes is from Cavan and I do not know if there have been any pyrite issues there at all. To the best of my knowledge, there have not. The problem has been in Dublin, Meath and some other parts of the country. Mr. Keyes may not have experience on it although he may be able to develop an understanding given his engineering background, which is clearly very helpful. I am concerned to ensure that he goes out very quickly to the estates where this is happening. He is very welcome to come to Castlecurragh where I passed JCBs and other equipment as I was leaving. This is a real problem for people living in estates with pyrite but who do not have enough to get it fixed. What are they to do? They are stuck in this limbo. If the construction levy had been imposed, there would be enough to fix all of the houses. At the very least, something needs to be developed whereby homeowners can get a certificate to say that pyrite will not develop as a problem.

As Mr. Keyes settles into his new role, what is his vision for that role? What is his first priority and what challenges will he face?

Mr. Jack Keyes

I will start with Deputy Coppinger's questions and then answer the Vice Chairman's. Deputy Coppinger has raised some fundamental issues and I do not have all the answers today. I have heard her clearly and I am aware of people with stage one or amber status and the difficulties they may be having. Moving onto the board, I will be looking at how that demarkation is made and drawing conclusions about whether the funding is adequate. It may be that the brief for the board to address those may have to be changed by way of legislation. I am not sure yet but that is my impression. Certainly, I hear the Deputy clearly. One of the early things I would like to do is visit the estates as she suggests. I have only seen one house being remediated as part of the preparation for the application but to go out and see some of the stage one houses, which I have not seen yet would be particularly interesting. I would be very happy and willing to do that.

I am not sure about the history of the fund and the levy. The funding comes directly from the Exchequer now. Communication and advertising was mentioned earlier and it is key. People deserve to know what is available. There is a good news story here as well as a bad news one. We have done a great job as a State to address this as well as the fact that there is a big gap there. Sometimes, we do not tell people what we do when we are focused on the problems. I will be looking at that early in the course of my tenure.

My vision is to try to help the people who are in this awful situation, balanced with the funding that is made available to the board. It is an awful position for people to find themselves in. The board has done a good job so far but we will be reassessing its role and efficiency if I go in.

The building regulations have been updated since the pyrite scourge began. Is Mr. Keyes satisfied that they will prevent pyrite again? Are they sufficiently vigilant from the quarry to the site? I have spoken to some engineers who think they are inadequate. If he is successful in his role, that may be something we can discuss with Mr. Keyes in greater depth in six months' time. I have been told by some that they think this may happen again.

I have a point about the overall picture on pyrite because we are dealing here with the private sector. When we look at local authorities and the amount of pyrite we are experiencing, I fear we have another problem having looked at an estate the other day. I first I encountered this going back to 2006 and 2007 at Avila Park in Finglas. I knew there was something very serious albeit I did not know it was pyrite. I got engineers out and it took us two years to figure out what it was. The true figures are staggering when one takes the public and private estates into account. I do not think we have done a full audit to determine how serious this is and the potential for further issues. As Deputy Coppinger said, there are some houses which have a certain amount of pyrite but that could activate further down the road. The potential is still there. To ignore those and just walk away from people in a different category because it is currently less serious will be done at our peril. Those people may face serious problems down the road. We have to look at that more carefully and not just dismiss people where one category is more serious than the other. We must tackle both categories.

I thank Mr. Keyes for attending to make his presentation to the committee and wish him the best of luck in his new role. I thank him for offering to return to the committee in future if the committee so desires.

Mr. Jack Keyes

I thank the Chairman and the members.

We will take a few moments to allow the new witnesses to take their seats.