Government weighs up industry levies to part-fund mica rebuilding costs

Proposals for similar levies were previously ruled out in cases of pyrite

The Government wants to impose levies on insurers, brick suppliers and builders to part-fund the rebuilding of homes damaged by defective mica bricks as concern grows about the prospect of costs exceeding €1.5 billion.

Minister for Housing Darragh O’Brien has asked attorney general Paul Gallagher to examine the feasibility of industry levies to secure a significant financial contribution from sectors involved in the mica affair.

Defective bricks have led walls to crumble in thousands of homes in Donegal and Mayo, necessitating expensive works whose average cost has risen to €174,000 per dwelling as engineers increasingly call for the demolition of the properties damaged most severely.

Proposals for similar industry levies were ruled out on constitutional grounds several years ago when the State was confronted with the problem of expanding pyrite in the floors of new houses and apartments. Pyrite remediation has already cost €166 million but to date the Government has recouped only €4.2 million from builders, developers and quarries.


Remediation scheme

Despite the legal difficulties encountered in discussions on a pyrite levy, Mr O’Brien has asked the attorney general to see if a way can be found to surmount them amid pressure to overhaul the current mica remediation scheme which opened one year ago.

“Both Minister O’Brien and the Taoiseach have discussed the matter with the attorney general and are working to examine all options to hold those responsible and those with responsibility to account,” the Minister’s spokeswoman said.

Any levy would be on companies and not their clients, meaning, for example, that there would be no specific charge on insurance policies. It remains unclear whether the Minister would seek to levy banks, in their role as mortgage providers to the home-owners, or professions involved in the design of homes.

However, the likely cost of rebuilding homes is growing rapidly as further problems emerge in Clare, Limerick and Sligo after first surfacing in Donegal and Mayo. Such costs are greatly in excess of the pyrite remediation scheme, which covers 100 per cent of the works with a current average cost of €65,000 per dwelling.

The mica issue came to the fore of the political agenda this week when thousands of Donegal protestors gathered in Dublin, calling on the Government to meet 100 per cent of rebuilding costs instead of the 90 per cent provided under the original remediation scheme.


Home insurers insist they are not responsible for remediation. “Mica damage is not included in the list of insured perils and is therefore not covered,” said Insurance Ireland, the industry group. “There is also generally an exclusion in household policies excluding damage arising from faulty workmanship, defective design or defective materials.”

Asked whether the Government had asked insurers for a contribution to remediation, the group said: “Government has not approached Insurance Ireland and we are not aware of approaches to members.”

HomeBond declined to answer questions on mica, citing “circumstances where disputes may be ongoing”. It cited an expert panel report for the Government which said “the concrete blocks which deteriorated in the manner observed were not fit for purpose”.

Asked about HomeBond’s stance, the Department of Housing said: “In response to complaints and claims from homeowners about cracking in external walls, in estates, in Donegal and Mayo, it is understood that HomeBond relied on an exclusion clause for third party/supplier negligence.”

The Construction Industry Federation, which represents builders, insisted it had “no part” in the mica affair “except hoping that the residents get the redress they need”.

The Irish Concrete Federation said: “Products such as concrete blocks are typically sold locally and, as a result, the overwhelming majority of ICF members are not directly involved in these issues.”

Arthur Beesley

Arthur Beesley

Arthur Beesley is Current Affairs Editor of The Irish Times