Tuesday 20 May 2008

Developer quits €600m social housing project

ONE of the country's largest property developers has pulled out of deals worth at least €600m to build social housing in Dublin.

Castlethorn Construction, which is owned by businessman Bernard McNamara, has decided not to go ahead with plans to build hundreds of new homes for the least well-off, citing the current economic climate and "substantial" changes in the housing market.

The Opposition lashed out at the Government for failing to support those awaiting social and affordable housing.

And the developer faces the possibility of legal action for pulling out of the deals, signed in the past two years.

Dublin City Council sources said that while the first priority was to go ahead with some projects, there would be "discussions" with the developer over a possible compensation package for withdrawing.

Housing Minister Michael Finneran last night said he was in discussions with officials "at the highest level" in Dublin City Council. He said it was a matter for the local authority.

Fine Gael housing spokesman Terence Flanagan lashed out at the collapse of the deal, branding it a "blow to the most vulnerable".

In an attack on Taoiseach Brian Cowen, he said his mismanagement of the economy would hit more people daily.

"The waiting lists for social and affordable housing in Dublin are the highest in the country and this deal collapse, due to Cowen's property crash, means that these people face an uncertain future," he said.

"We are now seeing the first large bloc of victims of the economic downturn and they are exactly the people who always suffer first in these situations.

"It is time the Government re-examines direct provision of social and affordable units to ensure the most vulnerable get a roof over their head."


The five projects affected involved construction of hundreds of social and affordable homes, with facilities, and a substantial number of private homes to be sold on the market.

Some 700 new homes were planned for the St Michael's Estate in Inchicore in a deal worth €265m. At least 220 were social and affordable.

Other projects include the redevelopment of O'Devaney Gardens off the North Circular Road with 860 homes, worth €180m, and 360 apartments on Dominic Street, worth €150m.

Another 179 units were due to be built at the Convent lands on Sean McDermott Street, of which 20pc would be social and affordable, with another 162 units on Infirmary Road, with 130 social and affordable.

The council said that the projects were "unviable" from the private partner's perspective as the deal was partly based on the sale of private units to fund the cost of the social and affordable units being provided free of cost to Dublin City Council.

"Our priority is to find a new solution that will allow us continue with the much-needed regeneration of these five areas," assistant city manager Ciaran McNamara said yesterday.

"The council is confident we will be still able to provide high quality social and affordable housing, possibly over a longer time span."

The Public Private Partnerships (PPPs) were adopted by the council as an economically efficient way of improving the public housing stock.

Dublin Central TD Cyprian Brady said: "If independent economic commentators, including the ESRI, are expecting the economy to grow within the next few years, both Dublin City Council and McNamara will be able to get a reasonable return for their investment by the time the work in completed."

Castlethorn Construction is developing 10,000 homes at Adamstown in west Dublin, but nobody was available for comment last night.

Paul Melia
Irish Independent


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