Cork County Council, in a countywide first, has set up a joint venture company aimed at providing major infrastructure projects which will aid the provision of public and affordable housing.
It has joined forces with the Ireland Strategic Investment Fund (ISIF) to help finance the building of roads, footpaths, sewerage and water schemes.
Interested developers seeking funding will repay the joint venture company at interest rates, more competitive than offered by many financial institutions.
It is envisaged that developers would provide an upfront percentage fee of the total infrastructure costs and pay the remainder as they sell off schemes.
Council CEO Tim Lucey said the joint venture company will be launched in the springtime and is adamant it could be replicated throughout the country.
ISIF has committed to initially provide €25m to the scheme and both it and the council will each invest a further €150,000 per annum over the next 10 years.
Mr Lucey said the council and ISIF had been working on developing the company for the last 18 months.
He said it will ultimately benefit public housing and affordable housing.
ISIF, managed and controlled by the National Treasury Management Agency, has access to a €8.9bn sovereign development fund which it invests on a commercial basis.
Mr Lucey said that from the perspective of ISIF’s recently refocused investment strategy, the joint venture will be consistent with housing investment and regional strategic themes.
He said the council would secure 10% of all houses completed which would be used under social and affordable housing schemes.
In Cork County Hall yesterday, Sinn Féin councillors Des O’Grady and Melissa Mullane were, however, adamant the council, due to its input, should demand 25% of all new houses.
However, , such a provision would require the government to implement changes in legislation.
“There’s an obvious gap in the market for it,” said Independent councillor Alan Coleman. “It’s Cork County Council stepping up to the plate to provide infrastructure at a reasonable rate. It’s a fantastic initiative. We’re ensuring there’s a mechanism there for developers to build housing.”
“One of the greatest impediments facing developers is getting the money to open up sites,” said Fine Gael councillor Michael Hegarty. “It’s key to getting things moving at a time when we’re seriously short of housing.”
Fianna Fáil councillor Gillian Coughlan inquired if there were any financial risks for the local authority, but the chief executive said: “ISIF will seek a commercial return on their funds. The operational costs of the company will be delivered into the fee charged to the developers.”
He added that the joint venture company will provide a progress report annually to the full council.