Donegal County Council says it remains committed to the acquisition of 17 houses at Lough Fern in Milford for social housing, and met with the developer as recently as the 10th of last month.
Three weeks ago, the developer told Highland Radio that there was an agreement, but no contracts were signed, and the council withdrew when process rose. He said he had subsequently done a deal with the Cooperative Housing Ireland group, but the council would not supporting that deal.
The council says that would effectively put two state funded agencies into competition.
In a statement, the council says on foot of an advert in January 2018, the developer entered into a turnkey procurement process with them, and just before work started in January 2021, submitted his final costs. The Council obtained government approval in February 2021 to acquire the 17 houses for jut under €3.5 million.
The houses were substantially completed in July 2022, but as a result of delays in completing the construction works due to Covid 19 and rising inflation costs, the developer sought an increase on his tendered costs. The Council made an increased acquisition offer in March last year, which to date has not been accepted.
In the context of the developer seeking to sell the houses to an approved housing body, the council says it is neither accepted nor appropriate practice for public bodies funded by the state to be engaged in a competitive situation to acquire the same houses, as it would drive up the cost to the taxpayer.
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Council statement in full –
Response to Press Queries on the 17 houses in Milford.
Further to your recent query in relation to the above, the Council can advise as follows.
The developer entered into a turnkey procurement process with Donegal County Council, on foot of an
advertisement in January 2018, and progressed through the various steps and stages of the process
including obtaining the various statutory approvals such as planning permission and Irish Water
agreement. Immediately prior to commencing works on site, the developer tendered his final costs to
the Council in January 2021. The Council subsequently obtained departmental approval in February
2021 in the sum of €3.47m, to acquire the 17 houses for the purposes of social housing. This was based
on the maximum construction cost ceilings at the time of construction.
The houses were designed and laid out to meet the specific needs of the Council for Milford and the
surrounding area, and comprise of nine 2 bedroomed, and eight 3 bedroomed houses. The Council
provided ongoing inspection during the construction of the houses as they would become Council
houses. The houses were substantially completed in July 2022.
As a result of delays in completing the construction works due to Covid 19 and associated inflation
costs, the developer sought an uplift increase on his tendered costs. The Council employed an
independent Quantity Surveyor to identify appropriate and relevant cost increases in line with
inflationary cost increases and departmental guidance. An increased acquisition offer was then made
to the Developer in March 2023, which to date has not been accepted.
The uplift in costs amounted to €361,000.
The uplift calculations were consistent with other developments that were approved within
the turnkey process at that time, and in line with department guidelines. The uplift is added only to the
items that were impacted by the increased prices.
The Department will sanction the monies based on the year that the construction costs were incurred,
which was 2021 and 2022. It is acknowledged that since 2022, the Department sanction would be for a
higher figure in respect of the construction years 2023 and indeed 2024 for the same houses. This is
based on the inflation and costs prevailing at the actual time of construction.
The Council has allocated significant resources to the delivery of this project and remains committed to
acquiring these units for the existing social housing need, subject to contract. Council officials most
recently met with the Developer on the 10th of January 2024 and again reaffirmed the Council’s offer
to acquire the 17 housing units.
In the context of the developer seeking to sell the houses to an approved housing body, it is important
to note that it is not accepted nor appropriate practice for public bodies funded by the state, to be
engaged in a competitive situation to acquire the same houses, where the state through different
funding mechanisms would in essence fund the acquisition of the houses. Such a scenario would result
in driving up the cost of the houses for the taxpayer, and indeed would have a knock-on effect to the
private housing market with increased prices.
End.
