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PAC 'concerned' that OPW building maintenance spending jumped from expected €9m to €39.4m

This follows the publication of the 2018 annual report of the Comptroller and Auditor General (C&AG) today.

PAC Chairman Sean Fleming
PAC Chairman Sean Fleming
Image: Eamonn Farrell via RollingNews.ie

THE PUBLIC ACCOUNTS Committee (PAC) has said it is concerned that spending on building maintenance by the Office of Public Works (OPW) jumped from an expected €9 million to €39.4 million over a four-year period.

This follows the publication of the 2018 annual report of the Comptroller and Auditor General (C&AG) today. 

The OPW has a nationwide portfolio consisting of more than 2,300 buildings of which around 600 are in the Dublin region.

Many of the buildings are occupied by other government departments and offices, to whom the OPW also provides building maintenance services.

The OPW estimated that maintenance and capital expenditure on property over the four-year period 2015 to 2018 was in the order of €760 million.

The current holder of the maintenance contract was first appointed in 2010. 

Following a re-tender in October 2014, the contractor was awarded a minimum three-year contract with provision for an extension of one year, which was exercised.

The contract states that OPW anticipated that the approximate contract value would be €9 million excluding VAT over three years — an annual average of €3 million.

However, the C&AG report today shows that the total value of the work carried out over the four-year contract period was significantly in excess of the estimate, amounting to a total of €39.4 million — an average of just under €10 million a year.

The chairman of PAC, Sean Fleming TD, has said the 2018 annual report published today highlights areas in the spending of public money and tax collection worthy of further examination. 

This includes spending by the OPW.

“The ongoing delivery of new office accommodation by the OPW is worthy of further examination, and the OPW will be having an early visit before the Committee,” Fleming said. 

“We are concerned that a contract for a service to provide maintenance services and to carry out minor capital works on part of its Dublin portfolio in late 2014, was anticipated  to result in a spending of around €3 million a year,” he said.

“However, over the years 2015 to 2018, actual expenditure was €10 million a year.”

 Rehab Group

The C&AG has also found that the Department of Education paid €4 million more (24% more) to the Rehab Group for a site in Sandymount, Dublin than what was recommended by an independent valuation report. 

The Department completed the purchase of this five-acre site and buildings from the Rehab Group in October 2016 for €20.5 million (€4.1 million per acre). The final payment was made in January 2017. 

However, in May 2016, an independent consultant engaged by the Department valued the freehold interest in the property at €16.5 million. 

The C&AG noted that the Department had “opted not to use external negotiation expertise when acquiring this site”. 

Fleming said all the matters referred to by the C&AG in his annual report will be examined in detail by PAC. 

The scheduling of the meetings on the annual report will be discussed at PAC’s meeting on Thursday.

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