Cost of Mica redress scheme could reach €3.2bn

Cost of Mica redress scheme could reach €3.2bn

Paddy Diver from Inisowen, Donegal with bricks made from Mica during a protest at Leinster House, Dublin. Picture: Gareth Chaney/Collins

The cost of the Mica redress scheme could rise by €1.8bn to a total of €3.2bn based on the final submission made by homeowners, a working group has found.

Housing Minister Darragh O'Brien has received the mica working group report and homeowners have also been sent the document to review.

It is understood the report suggests that the Minister should consider a 100% grant, however, this would be subject to the revised expenditure caps for each of the remediation options available to those living in properties built with the defective blocks.

The report states that these remediation options have some equivalence with the Pyrite Remediation Scheme as they involve repairs to the existing home.

The report also puts the current overall cost of redress at €1.4bn.

However, based on the homeowners final submission the estimated costs of the changes requested by campaigners could rise by €1.8bn to €3.2bn.

This is on the basis of capital works and associated costs only and does not take account of potential costs for items sought such as compensation for homeowners and inclusion of all non-residential buildings impacted.

The working group agreed a number of items that should be put forward for consideration as improvements to the Scheme in the immediate term.

They have suggested that the grant calculation be based on a cost per square foot, discounted as appropriate, to exclude the cost of foundations, betterment and salvage.

On the issue of covering rental costs when families are waiting to have their homes re-built, it is understood the group has agreed in principle but the quantum has yet to be agreed.

6,600 homes may need repair

The department estimates that approximately 6,600 homes may require repair, which does not include additional impacted homes not eligible for the scheme currently.

“This includes all potentially eligible privately owned homes in the counties of Donegal and Mayo and an estimate for homes in other local authority areas which may come into the scheme. This figure also includes an estimated 1,000 social homes which according to local authorities will need remediation," the report reads.

The homeowner's presentation states that "the majority of mica/pyrite victims are not in a position to gain entry to the scheme due to the prohibitive costs at stage 1 & stage 2 (approx 15k) of the DBS application process."

The report also found that the average cost per home in the existing remediation scheme had risen to €174,000 after nine months, to €204,000 after 12 months and now stands at €209,000, the report adds: "Given the scale of Exchequer funding required, any changes to the scheme which contribute to a further rise in the projected cost will require very serious consideration by Government.” Meanwhile, the submission to the working group from Engineers Ireland said that they did not believe that uncertainty around the redress scheme means contractors may refuse to take on work in affected properties.

"In its current form, however, there is a high likelihood that individual professionals will discontinue any further involvement with the Scheme," the submission read.

"Several registrants have already indicated their intention to withdraw from the scheme. In reality, on the ground, the Scheme has already stalled due to uncertainty, and it will draw to a halt very soon if the registrants’ concerns are not addressed."

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