Contract awarded for 465 social housing units under Bundle 2 of PPP Programme

  • Construction to start immediately across eight sites in Cork, Clare, Galway, Kildare, Roscommon and Waterford
  • Brings the number of social housing units under construction across Ireland through PPP to 999 across 10 local authorities

On behalf of the Department of Housing Planning and Local Government, the National Development Finance Agency (NDFA), part of the National Treasury Management Agency (NTMA), today announced contract award of the Social Housing Bundle 2 PPP project to Torc Housing Partnership.

Bundle 2 comprises eight sites for the development of 465 social housing homes across counties Cork, Clare, Galway, Kildare, Roscommon and Waterford. Construction of the 465 units will commence immediately following the award of the contract, with construction expected to take between 14-18 months (depending on the site in question).

   Site (Local Authority) Number of    Units
   The Walk, Roscommon Town (Roscommon)    53
   The Miles, Clonakilty (Cork County)    52
   Slievekeale (Waterford City and County)    58
   Ballyburke (Galway City)    74
   Shannon East (Clare)    51
   Poundhill, Skibbereen (Cork County)    50
   Oakwood, Macroom (Cork County)    50
   Butterstream, Clane (Kildare)    77
   Total    465

County Cork is leading the way in Bundle 2 of the PPP Programme, with 152 of the 465 new social homes being delivered on three sites across the county.  In 2016 only 45 social homes were delivered in Cork City and County. Since then 680 new social homes have been built, and another 885 are currently on site. All of this has happened under Rebuilding Ireland.

The PPP Process for Social Housing

The NDFA acted as agent for the Department of Housing, Planning and Local Government (the Sanctioning Authority) and Cork County Council (the Sponsoring Agency on behalf of all local authorities involved).

Using a payment and availability Public Private Partnership agreement to construct social housing is a new innovation in Ireland, with the first such homes commencing construction under Bundle 1 earlier this year.[1] This approach leverages economies of scale through large numbers of homes being tendered, constructed and maintained for 25 years in bundles of sites. Competitive private financing and cooperation between construction, facilities management and tenancy management bodies are brought together through consortia that bid for each Bundle.

The procurement process that was followed for Bundle 2 saw four consortia shortlisted and invited to tender, with the competing bids submitted in February 2019 and evaluated on technical and financial criteria. Following this process, and in line with the detailed PPP procurement procedures as set out by the Department of Public Expenditure and Reform, the preferred tender was compared against the pre-approved Public Sector Benchmark, in order to confirm that it offers a Value for Money solution for the Exchequer.

The contract for Bundle 2 has been awarded to Torc Housing Partnership. Under the contract, the construction works on these developments will be delivered by a joint venture between JJ Rhatigan & Co. and the Spanish firm Obrascon Huarte Lain S.A. Upon completion of construction on each site, facilities management services will be provided by Derwent FM and Tuath Housing Association for a 25-year service period. Tuath will also provide tenancy management services. These bodies are also providing equity for the project in conjunction with the lead equity providers Equitix Ltd. and Kajima Partnerships Ltd. The German bank Nord/LB are providing debt funding for the project.

Details in respect of the development sites can be found here: https://www.ndfa.ie/project/social-housing-ppp-bundle-2

The above project is the second bundle of units being delivered through the Social Housing PPP Programme, and it follows on from the successful awarding of the contract for the first bundle of sites to Comhar in March 2019. Construction on the 534 social housing homes across six sites in the greater Dublin region has commenced, with the first units scheduled to be delivered under Bundle 1 from mid-2020.

PPPs represent one strand in the plan to accelerate the supply of social housing, which is the second pillar of the Rebuilding Ireland Action Plan for Housing & Homelessness. These Social Housing Public Private Partnerships will deliver up to 1,500 social housing units across three bundles of sites.

Eoghan Murphy, Minister for Housing, Planning and Local Government, said:

Today’s announcement represents an important milestone in the provision of social housing through the innovative Social Housing PPP programme, under which 534 social homes are already under construction.

Firstly, I am delighted to announce that the second bundle of sites under this programme has reached Financial Close, with contracts being signed with the Torc Housing Partnership, who successfully tendered for this project. This will see the delivery of 465 homes across eight locations in five local authorities. Not only will these units help contribute to our national targets for social housing delivery under Rebuilding Ireland, but each development will form an important part of their associated communities, and will provide long-term secure homes for people across the country.

The structure of the PPP process ensures that construction of these units will commence immediately, with the first homes from this bundle being available for occupation by their new tenants from in early 2021.

I would like to acknowledge the dedication and hard work of staff from the relevant local authorities, in particular Cork County Council in their role as lead local authority; the National Development Finance Agency who led the procurement process for this project, as well as officials from my Department. The contribution of the various members of the Torc Housing Partnership is also very important, and the delivery of these units is now entrusted to them.

I look forward to watching the progress of this second bundle, and would like to wish our partners in the local authorities and the NDFA well in undertaking this process over the coming months.”

Tim Lucey, Chief Executive, Cork County Council, said:

The PPP model is an integral part of delivering local authority social housing requirements. Cork County Council is particularly proud to have the opportunity to be the lead authority for the PPP Bundle 2 Project and to be part of the successful collaboration between the Department of Housing, Planning and Local Government, the NDFA, and the Local Authorities. This is a collaboration which will have a real and meaningful impact in social housing provision.”

Andrew O’Flanagan, Director of the NDFA, said:

“This is the second social housing PPP to begin construction this year, delivering significant additional social housing capacity for six local authorities.

The project is a strong example of effective collaboration between the Department of Housing, Planning and Local Government, local authorities and the NDFA, using a model that will deliver homes for people who need them as quickly as possible and ensure the effective management and maintenance of these homes for many years to come.”