THE CONSORTIUM with which the Government has ended talks on building the proposed new super prison has accused Minister for Justice Demot Ahern and the Irish Prison Service of not explaining the full facts behind the failed process.
A source within the Leargas consortium said it was now being suggested the consortium should have been able to deliver the same reduction on construction costs as those witnessed of late in projects such as schools.
However, Thornton Hall prison, in north county Dublin, was a much more substantial project that would have been funded by inter-bank lending, the cost of which has very significantly increased in recent times.
Given the high security nature of the facility, much of the work would have been carried out by specialist security contractors. Because there are so few of these firms the scope to secure cheaper prices is limited, the Leargas source said.
The project was to be completed on a public-private-partnership (PPP) basis.
This would have involved Leargas designing and building the 2,200 berth jail and providing some services once construction was complete.
The prison would have been paid for by annual payments over 25 years by the State to Leargas.
The Department of Justice said the cost of the project was unaffordable because the annual repayments sought by Leargas were 30 per cent higher than those sought three years ago, when the consortium was first shortlisted.
The Leargas source said 85 per cent of the increase was accounted for by the higher cost of financing. The same source said there were clauses in the contract that would have allowed for terms to be renegotiated when the lending rates decreased again.
Meanwhile, the Government has repeated its commitment to the new prison but has left open the question of the scale of the project and how it will be built.
In the Dáil yesterday Taoiseach Brian Cowen, said value for money was crucial to the Government’s approach to the issue.
He said the project would be brought forward based on comprehensive new proposals now being formulated by Mr Ahern.
Mr Cowen added 19 acres had been sold at Shanganagh for the purpose of funding the purchase of 150 acres at Thornton Hall.
“What is clearly the case now is that because of the increased cost of financing under the PPP system, in this particular instance, it is not possible for the Government to proceed because we want to get value for money.
“It is precisely because of the fact we have that [land] asset in place that we will be able to proceed with a prison, which is needed,” he said.
Mr Cowen added that the Mountjoy complex was nearly 160-years-old and needed to be replaced.
There would be 400 extra prison places available to come into commission in the meantime at Wheatfield, Castlerea and Portlaoise jails.
Thornton Hall has been proposed as a means of resolving overcrowding in the prison system. The new prison would replace Dublin’s Mountjoy jail.
Thornton Hall: the story so far
January 2005:A 150-acre site at Kilsallaghan near Swords, Co Dublin, is acquired for €30 million. The price per acre is far higher than any other sales in the area at that time, prompting sustained criticism of then minister for justice Michael McDowell. The site is to be the location for a new 2,200-berth superprison to replace Mountjoy Prison. The near 1,500 extra spaces it will provide will end chronic prison overcrowding. A new mental hospital is also planned at the site to replace the Central Mental Hospital, Dundrum, Dublin.
July 2006:Leargas consortium, comprising Michael McNamara Construction, Barclays Private Equity and GSL, a prisons operator, is among a shortlist of four bidders.
July 2006:Mr McDowell unveils plans for a new urban village at the Mountjoy complex. The regeneration will begin when the site is vacated. It will be carried out under the direction of the Office of Public Works, with a design team headed by one of the country's foremost architectural firms, Heneghan Peng.
October 2006:Green Party chairman Dan Boyle, then an opposition TD, tells the Public Accounts Committee the price paid for the Thornton site was eight times higher than the market rate.
May 2007:Leargas confirmed as preferred bidder. Talks begin between consortium and State.
August 2007:The High Court rejects a bid by residents of Kilsallaghan to halt the prison.
May 2008:Taoiseach Brian Cowen tells the Dáil there is "no indication" the talks with Leargas have stalled. He was speaking as McNamara withdraws from five Dublin public-private partnership (PPP) social housing schemes.
November 2008:It emerges that almost €11 million has been spent on the Thornton Hall site preparing for construction.
March 2009:The visiting committee of Mountjoy Prison says it believes Thornton Hall will be delayed "for a number of years".
March 2009:Minister for Justice Dermot Ahern says the contracts with Leargas will be signed "later this year".
May 2009:Irish Prison Service and Department of Justice announce its two-year negotiations with Leargas have ended because the prices quoted by the syndicate are too high. – CONOR LALLY