Pyrite Remediation Programme Issues

Dáil Éireann Debate, Tuesday - 4 December 2012

Tuesday, 4 December 2012

Ceisteanna (57, 59)

Joan Collins

Ceist:

57. Deputy Joan Collins asked the Minister for the Environment, Community and Local Government if, noting that the HomeBond company which led house purchasers to believe they were insured against major structural damage, has shown surplus funds of €25 million which will not be called upon for major structural damage for houses built before HomeBond negotiated backing by a real insurance company in 2008, he will ensure that these funds are used to remediate HomeBond guaranteed housing damaged by heave inducing pyrite. [54253/12]

Dessie Ellis

Ceist:

59. Deputy Dessie Ellis asked the Minister for the Environment, Community and Local Government the actions he is now putting in place as a result of his meetings with the construction industry insurance, quarries and banks with a view to levying these industries as was recommended by the pyrite panel; if he was successful in his discussions with these groups and an agreement has been reached or if he will seek to impose a solution. [54547/12]

Freagraí ó Béal (14 píosaí cainte)

Deputy Fergus O'Dowd

I propose to take Questions Nos. 57 and 59 together.

HomeBond is a private limited company providing structural guarantees for new houses and, since November 2008, the HomeBond insurance scheme has been underwritten by Allianz Insurance. As in the case of any private company , its operations, including how it deals with the management of funds, inspections or claims, are matters for its management and board of directors. In that regard, HomeBond Insurance Services Limited is regulated by the Central Bank of Ireland and my Department has no function in these matters. The Minister, Deputy Hogan, has put on record his disappointment with the stance adopted by HomeBond by withdrawing in August 2011 cover for home owners for pyrite related damage.

Following receipt of the report of the independent pyrite panel in late June 2012, the Minister has engaged with all of the main stakeholders identified in the report, including HomeBond, to explore options for a resolution to the pyrite problem, including possible funding mechanisms for a remediation scheme. Discussions are now at an advanced stage and are expected to conclude very shortly, with outcomes arrived at on the basis of the pyrite report. The pyrite panel was unambiguous in its view that those with direct and indirect responsibility for the pyrite problem should bear the cost of remediation, and this has been the core of the Minister's discussions with the stakeholders over recent months.

It was considered that sufficient progress had been made to justify the continuation of these contacts for a further short period. However, matters must be concluded very shortly and outcomes must be arrived at on the basis of the report of the pyrite panel in order that the entirely unacceptable position in which affected home owners find themselves can finally begin to be addressed. The Minister has made clear that in the event that stakeholders do not, either individually or collectively, agree a voluntary funding mechanism for a remediation scheme, he will seek Government approval for the imposition of a statutory levy on the construction, quarrying and insurance sectors. He has already announced that he is proceeding with the establishment of a resolution board, as recommended by the independent panel, and final arrangements for its establishment will be made in conjunction with consideration of the final written positions of the stakeholders.

Deputy Joan Collins

The Minister of State indicated that reports should be available soon. It is disgraceful that the Government continually provides the same information on what will be the position at some point in the future. In the meantime, pyrite remediation measures have not been carried out on a single house. People can no longer wait for action. Has HomeBond been challenged to use its surplus of €25 million to fund remediation measures or investigations to certify whether pyrite is present in homes? It is crucial that the company is tackled on this issue as it is unacceptable to leave families in limbo. The Government, which has acknowledged the scale of the problem on numerous occasions, must speed up the process. Has it raised with HomeBond the company's €25 million surplus?

Deputy Fergus O'Dowd

With respect to the Deputy, her figure on the remediation of homes is wrong. The independent report, which I have with me, states that 1,100 homes which were seriously-----

Deputy Joan Collins

HomeBond has not done any remediation work.

Deputy Fergus O'Dowd

I did not interrupt Deputy Collins. The report states that 1,100 homes with serious pyrite problems are being addressed. I concur with the Deputy that all of the families involved are in an awful and extremely difficult position. They purchased homes for a fortune at the height of the market and generally before 2008 only to find significant pyrite problems with their homes. Another 850 houses, for which claims have been made, are also being addressed. It is estimated that in theory pyrite problems could occur in 11,000 houses. The report maps these homes using a colour code in which red indicates the homes in question must be immediately addressed, yellow means they must be monitored over a lengthy period and green means there are no individual problems.

Deputy Dessie Ellis

It is disappointing we have not yet had word back from the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, given that he has twice indicated to us that he has given the industry a deadline to produce a solution to the pyrite problem. He stated previously that he was considering making requests for funding remediation measures in the houses in question. The issue of funding is fundamental.

The Minister of State referred to a figure of 11,000 homes. As Christmas approaches, it is vital that urgent action is taken to address serious problems found in 850 homes. If legislation is required, as appears likely, a solution will not be found until the new year. Legislation must be retrospective as we must avoid a scenario in which people are informed they missed a deadline for submitting applications and so forth. This issue needs to be addressed urgently.

Deputy Fergus O'Dowd

I agree with the thrust of the Deputy's argument. As he correctly noted, this is a serious problem. I stress, however, that the Minister established the independent panel in June 2011 and it did not report until earlier this year. He has held a number of significant meetings with all of the stakeholders and insists that responsibility for meeting the costs of addressing the pyrite problem rests with those who built or insured the homes in question. The Minister is committed to resolving this problem as quickly as possible.

One of the proposals in the pyrite report is to establish a resolution committee to address all outstanding issues. This will provide a fail-safe mechanism in the event that problems in certain houses are not addressed. The Minister is establishing a body which will deal effectively with any issues that may yet arise. This will provide closure for families. The Minister is working extremely hard to resolve this matter and whatever needs to be done will be done. If possible, however, it is better to have a voluntary, agreed process.

Deputy Joan Collins

The people who are experiencing this problem are frustrated because time and again they have heard about deadlines. Pyrite remediation works on the 1,100 homes to which the Minister of State referred were carried out by Premier Guarantee rather than HomeBond.

I have been reliably informed that there has been no movement on the red category claims submitted nine months ago. For those who most need it, the pace of change is still sluggish. Has HomeBond been challenged in respect of the surplus of funds and the €25 million for quick remediation?

Deputy Dessie Ellis

Regarding the resolution board, it is important that there be a mechanism for judging the cost of the remediation works. It will vary and we have heard figures from €50,000 to €80,000. Local authority housing has the same problem. While there is a mechanism to get money from the Department for such housing, would it not make sense to include local authority housing in this scheme so that it could receive funds to deal with its problems? We will get no money from the builders, the Construction Industry Federation, CIF, and so on. Insurance companies should have dealt with many of these cases. If we pursue people, we will need to go to the ends of the earth. It is important that we include local authority houses with pyrite problems.

Deputy Fergus O'Dowd

Local authority problems in places such as Ballymun are being addressed successfully.

Deputy Dessie Ellis

Yes.

Deputy Fergus O'Dowd

Fingal County Council is not being criticised. The council dealt with the issue adequately as soon as it came to its notice in 2007. However, this matter never appeared on the building horizon until it occurred.

Deputy Joan Collins

Wrong.

Deputy Fergus O'Dowd

None of the academic or training courses for professionals, inspectors of buildings and so on viewed it as an issue. The problem is being addressed.

I agree with Deputy Ellis, in that the standards must be independent and stand up to scrutiny, and the job must be done and certified. A home owner will have a certification to the effect that the house is pyrite free.

Notwithstanding Deputy Joan Collins's concerns, the Minister, Deputy Hogan, is committed to resolving this issue as quickly as possible. When the board is announced and voluntary agreement is reached, there will be finality to this issue, at least in terms of the process.