C&AG: Government cancels social housing PPP after costs rise to €1.28m per home

C&AG report finds the proposed 486-home scheme was significantly more expensive than two previous social housing PPPs

Plans were changed to directly deliver the 486 social homes after concerns emerged about the long-term costs compared with two previous PPP schemes. Picture: Gareth Fuller/PA Wire

The Government cancelled a public-private partnership (PPP) to build almost 500 social homes after costs rose to €1.28m per house, the Comptroller and Auditor General (C&AG) has found.

Plans were changed to directly deliver the 486 social homes after concerns emerged about the long-term costs compared with two previous PPP schemes.

The completion of the homes has been delayed by more than 18 months, with completion expected in late 2028 or early 2029.

The report by the C&AG found that the cost of the homes would amount to €1.28m per unit over the 25-year lifetime of the project, with individual construction costs ranging from €428,000 to €505,000, excluding VAT.

The high capital cost was acknowledged by the Department when tenders for the PPP were submitted, with the project costing more than double the first scheme and more than 70% above the second scheme.

However, after the preferred bidder was appointed, a further review of the costs “gave rise to value for money concerns”, the C&AG report states.

“These resulted in the Department of Housing’s decision to cancel the Bundle 3 PPP, with an expected cost of €1.28m per unit over the 25-year lifetime of the project, and to proceed with the construction using the traditional procurement model,” it says.

Cost concerns

The cost review, which took place in February 2025, found that the significant increase between scheme two and scheme three was “not explained by inflation”.

“The increase in unit cost above inflation was attributed to differences in the site conditions, typology and specifications and the proposed developers’ margin,” the report states.

The first bundle cost €119m while the second cost €129m, excluding VAT.

The decision by the Department of Housing to cancel the third scheme saw its preferred bidder bring a judicial review challenging the decision.

A €4m settlement was reached between the Department of Housing and the preferred bidder following a mediation process.

“The Department of Housing considered this amount to be broadly in line with the cost of the work completed by the preferred bidder during the tender stage, including utility connections, diversion preparations, advancement of planning conditions, tree felling, site clearance and design drawings,” the report states.

It adds that the decision to cancel the PPP process “appears to have been the preferred outcome rather than proceeding with what might have been a poor value for money”.