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Cost of refurbishing State-owned factory spirals from €1.2 million to over €3 million

Údaras na Gaeltachta says it is confident the State is receiving value for money.

pjimage (2) The image on the left shows the factory before works commenced. The image on the right shows what the premises looks like externally now. Source: Google Streetview/Michelle Hennessy

THE COST OF refurbishing a factory in Meath owned by a State agency is expected to reach more than €3 million – triple the original commitment. 

The owner of the premises, Údaras na Gaeltachta, is responsible for the economic, social and cultural development of Gaeltacht areas and encourages investment in these communities through business grants and other initiatives.

TheJournal.ie can reveal that this State agency has now admitted there were “shortcomings” in the tender process for this project.

However it has defended the overspend, stating all of the spending was approved and it is confident the State is “receiving value for money”. 

It has said additional costs arose due to difficulties with the building’s roof and electrical supply, as well as emergency works after storm damage and specific requirements made by the tenant company. 

This tenant company, Novelplast, says its specific requirements were “minor” and it will be covering those costs. 

In 2018 the agency approved investment Novelplast and agreed to a lease with the firm on a factory owned by Údarás in Gibbstown Co Meath. 

The agency also committed to renovating the factory, at an estimated cost of no more than €1.2 million. TheJournal.ie understands that final costs associated with renovating this premises are now expected to exceed €3 million.

In its end of year review for 2018,  Údarás na Gaeltachta said it had approved support in the Meath Gaeltacht for projects which would result in 27 jobs and investment of €2.52 million.

“Most of the approved posts pertain to Novelplast, which will commence a project in Baile Ghib in 2019,” the review stated.

The Meath Gaeltact is the smallest Gaeltacht area and consists of two adjacent villages of Ráth Chairn and Baile Ghib (Gibbstown). It has a population of around 1,800 people. 

‘Shortcomings’

Although final works have not yet been completed, the factory, which manufactures PET plastic pellets, opened in the latter half of 2019 and is now operational.

TheJournal.ie was not permitted inside the premises but this image posted on the company’s Facebook page in August shows a section of the interior of the factory:

Source: Novelplast via Facebook

In a statement to TheJournal.ie, Údarás na Gaeltachta said the factory building had fallen into a state of significant disrepair since the departure of a longterm tenant in 2012 and it had committed to funding the upgrade to bring it to required advance factory specifications. 

“Regarding the project costs, significant difficulties with the building’s roof and electrical supply came to light as works progressed, along with emergency works arising from storm damage, resulting in material health and safety issues that needed to be addressed as a matter of urgency,” the statement said. 

Údarás na Gaeltachta’s Board approved €1.2 million for the initial works, and an additional €600,000 was further approved by the Board to address the health and safety and electrical supply issues.
Specific works required and requested by the tenant company in relation to its production needs are being charged directly to the company. All of the spend on this project has arisen from requirements around the factory infrastructure and the tenant company’s specific needs, and all of the required spend has been approved.

TheJournal.ie asked Údarás na Gaeltachta to provide tender documents associated with the work on the factory, but these were not supplied.

The agency said in a statement that a tender process was in place for the most significant element of the works. However it said it has identified “shortcomings in the overall tendering process”

These shortcomings, according to ÚnG were due “primarily to time-pressures arising from the significant initial growth and development of the company and the need to progress the project at a pace that would not impact on the company’s employment and production development”. 

“Údarás na Gaeltachta has taken the relevant steps to ensure that such shortcomings do not reoccur.”

Neil Skeffington, CEO of Novelplast, said the specific requirement his company had requested were “minor”.

He said the additional costs incurred in the overall project related to “problems with the roof and electrical supply, which were addressed by Údarás and not in any way related to Novelplast”.

We did have some minor specific requirements for additional work related to our production process, for which we have agreed to pay Údarás for in the normal way.

He said the company is “now up and running” in the plant in Gibbstown and is “ahead of plans in terms of employment”.

Údarás na Gaeltachta said Novelplasat has “already outperformed initial employment and revenue targets, and with significant growth projected, Údarás na Gaeltachta is confident that the State is receiving value for money for the expenditure on the State-owned asset, along with social and economic return to the State arising from employment and revenue generation”.

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