Minister for the Environment, Community and Local Government, Phil Hogan was present in the Dail on Wednesday, June 12th 2013 to answer questions. Mick took the opportunity to ask the Ministert the criteria that will be used to decide who will carry out remedial works on houses damaged by pyrite. You can watch the Minister's response here or read the full transcript below.
Who will carry out remedial work on pyrite damaged houses
HomeBond is one of the construction stakeholders which has agreed to set up a not-for-profit entity to implement a programme of remediation in accordance with the pyrite remediation scheme drawn up and published by the Pyrite Remediation Board, PRB, on its recently launched website. Work is progressing on the establishment of the entity and it is intended that this will be completed shortly. The stakeholders are finalising nominations for the board of directors and are agreeing the appropriate legal format for the entity, including the articles and memorandum of association. HomeBond will nominate two of the six directors proposed. The PRB is in discussions with representatives of the stakeholders with a view to finalising its contribution to the pyrite remediation process. HomeBond’s contribution will take the form of providing management, administration and technical services towards the implementation of a remediation programme and will also contribute towards the cost of establishing laboratory facilities for testing for pyrite. Detailed modalities that will provide for open and transparent processes, including the procurement of building services, are being discussed between the PRB and the representatives of the construction stakeholders but are not yet finalised. The remediation programme for homeowners who have no other viable option to have remediation works undertaken will be carried out under the direction and supervision of the PRB. I am confident that the PRB will ensure that the procedures put in place will adhere to best practice in terms of fair competition and will require compliance with standard procurement procedures. The PRB will have oversight of the various stages of the remediation process and will ensure that all works will be carried out in accordance with Irish standard 398-2:2013 - reactive pyrite in sub-floor hardcore material - methodology for remediation works.
I welcome the fact the board is up and running and that the process is underway. We do not know whether it will be a success but I will not prejudge it. I accept a lot of the problems being flagged are a result of the fact that this is unknown territory. While acknowledging that and accepting the bona fides of the Minister in that regard, he has failed to answer a huge part of the questions I asked. The contributions and involvement of HomeBond in this matter is of huge concern for residents. It walked away from homeowners with claims a number of years ago, and has now been resurrected from the dead and re-involved in the process. The Minister referred to it being involved in management and having technical services. It has already tested some houses, but the benefit of those tests cannot be passed onto homeowners now to avail of remediation schemes. The Minister has not answered the fact it has €25 million in a bank account which will not be drawn on for any other purposes because it is now a properly constituted insurance scheme. The moneys collected under the old scheme will not be drawn on anything other than pyrite. Why has the Minister not requested that money be brought to the table? Many of the measures seem to be restricting participants and homeowners in accessing the fund and are dictated by money or lack thereof. Surely HomeBond should put that money into this kitty. Could the Minister comment on the fact that HomeBond has been in a number of estates with pyrite with developers and has minimised and talked down damage which residents believe to be caused by pyrite? They have been told not to worry because it is not pyrite. Will that not be a problem if they will be involved in the process later on?
I share a lot of the concerns of Deputy Daly in regard to HomeBond. The fact it did not assist customers when they had problems with pyrite in their homes is disappointing. It is a private company which was set up in 1978 for the purpose of giving structural guarantees. Deputy Wallace will be familiar with its role, as will others who have been involved in the CIF. It did a reasonably good job for what it was set up to do initially. However, when it came to pyrite it worked on the small print and did not come good in dealing with customers. It is a private company and I cannot confiscate its assets or money in its account. We are not in a communist state. We will not allow it to walk away from engaging with the process and dealing with its responsibilities to people who have pyrite in their homes. I was not legally obliged to do anything, but I set up the independent pyrite panel and established the facts, rather than going on top of the head remarks about the vast numbers of people involved in the process. We established the facts in a very credible panel and have set up a process to help customers. I will make sure that, as far as is humanly possible and in as legal a manner as possible, the process set in place will help those people who regrettably have pyrite in their homes. HomeBond, which is a private company, will have to step up to the plate better than it has done to date.
With regard to the Minister's point on HomeBond being a competent company, my experience is very different. Generally, I found it left a lot to be desired. My question concerned which builders or companies would get the opportunity to carry out remedial work. From what I can see, the chairman of the PRB comes from Roadstone-----
Clare DalyJim Farrell comes from Pyremco.
This would worry me. Those who were involved in the process in any form should not have any say in selecting who does the work. We need an independent body to set up a panel of construction companies from which homeowners can pick. If it is left in the hands of people connected to Roadstone, the CIF and HomeBond the bigger players will be involved. If one looks back on the poor work that was done over the last ten years in the city, the majority was done by bigger rather than smaller players. We need an independent group to decide who gets the work otherwise we will not have the fairness to which the Minister referred. I give Minister credit for setting up the panel. Let us do it right. Phil Hogan
I set up the PRB to do things right. I have put people on the board who have expertise and credibility to make sure the job is done right. We have to set up a special purpose vehicle to draw down money from the banks, on which stakeholders are represented. I have to establish a private entity in order to bring money into the system to use for remedial work on houses. I want to see those in the industry who are responsible for the problem sharing the responsibility of solving it on behalf of the people who, through no fault of their own, ended up with this problem. For Government accounting purposes it has to be done in a certain way. The PRB and this work will be legally underpinned in the House when we introduce legislation which, it is to be hoped, will be enacted before the summer recess. I have every confidence that Mr. O'Connor and the PRB will do a good job on behalf of the people, ensure the money is spent on the remediation process and people can resume normal life again, arising from the activities of people who have let them down.
Clare DalyHomeBond was not just a private company, rather, it was a figleaf created by the CIF to pose as a structural guarantee when in reality it was not. In fairness, we have debated the issue many times here. The Law Society and others warned it was underfunded as early as 20 years ago. It is a fact that it has resources in its coffers. The Minister will propose legislation which will be passed. It will put levies on quarries and people who pay ordinary insurance fees will foot the bill. Yet, he cannot introduce legislation to make HomeBond pay its share. I do not accept that.Another huge issue for homeowners is who does the work. The idea that some of those who were responsible for this problem would be asked to fix it is something that homeowners do not want. The idea of an efficient panel which would be accessible to people, possibly in a similar manner to how local authorities have a pool, companies tender for a job, are on a panel and the same team of local builders can be wheeled out, is desirable.
Mick WallaceIf the members of the Pyremco group which consists of representatives of HomeBond, the Construction Industry Federation and Roadstone choose their friends to do the work, will the Pyrite Remediation Board have an overruling say in the matter or will it let them off with it?
Dessie EllisI am not sure how matters are generally arranged in the sequencing of questions, but I had assumed I would have a chance to speak before colleagues were allowed to ask supplementary questions.
The Deputy is getting his chance now.
Thank you, Leas-Cheann Comhairle. In regard to HomeBond, that company refused even to meet the committee or engage in any way in its deliberations, which was disappointing. There was a certain arrogance in its position. I have heard a figure of €25 million in regard to it. Perhaps the Minister might indicate whether that is correct. The major issues with the proposed scheme are how it will be funded and how quickly it can deliver results. I recall that either the Minister or one of his spokespersons indicated some time ago that legislation to introduce the proposed levy would be brought to the Dáil before the summer recess. There is no sign of that important Bill being brought forward before the end of July. In the meantime, people's homes continue to deteriorate. Of the homes affected, at least 800 are in very serious condition and require urgent remediation. The situation should not be allowed to drag on any longer. I understand the proposal is to levy the insurance companies and quarry owners, but there have been suggestions the latter intend to initiate a court challenge. Will the Minister comment on this? Representatives of the industry have made representations to Members, arguing that these additional costs would be unjust. I am not sure whether that matter can be dealt with in the legislation.
Any work carried out under the scheme will be certified by the Pyrite Remediation Board to ensure it meets the highest possible standards. Deputy Mick Wallace can be assured that the days of jobs for the boys are over. That type of carry-on is what caused the problems in this country in construction, including the shoddy workmanship we have seen. I am depending on Mr. O'Connor and his board to ensure the work is done properly. Contracts will not be awarded on the basis that certain people have undertaken work in the past. Mr. O'Connor will have an important role in overseeing the whole process. He and his board should be allowed to deal with these matters. I have great confidence that they will ensure an effective policy of oversight in everything that is done. Applications will be sought in July from persons who wish to participate in the scheme. The financial institutions are finalising the manner in which they can transfer their loan to the special purpose vehicle for the purpose of drawing down the moneys allocated. The final draft of the Bill will go to the Government very shortly and I intend to have it enacted before the summer recess. The pyrite levy and the insurance levy will be part of the repayment capacity of the loan in due course. I expect we will see some activity over the summer months in getting the scheme up and running.
Will the banks be contributing an up-front sum, as the Minister initially indicated.