Sites bought at top of market now lie empty as many schemes are 'deferred'


THE DECENTRALISATION DEBACLE:The flawed plan to decentralise thousands of public servants involved massive acquisition costs, writes FRANK MCDONALD,Environment Editor  

IN 2007, the Office of Public Works (OPW) spent just over €10 million buying a site of less than two acres in Drogheda, to provide a new headquarters for the Department of Social Protection.

At €5,724,432 per acre, it was by far the most expensive acquisition by the government for its "decentralisation" programme.

It might also be money down the drain, as this planned move of the department from Busáras in the centre of Dublin has now been "deferred", pending a review of the remaining relocations involving more than 7,000 public servants. The review, due to be completed next year, is being carried out largely on cost grounds.

The second most expensive purchase was in Killarney, where the OPW paid €4.5 million for a 1.2-acre site in 2005. Since then, new offices for the Department of Tourism, Culture and Sport have been built (costing €11.17 million) to house 77 of the 103 civil servants who will ultimately occupy it. Rent for temporary offices since 2005 has amounted to €140,000 per year.

Third most expensive was Waterford, where €8 million was spent in 2008 acquiring a three-acre site to house about 225 staff from the Department of the Environment - a project dear to the heart of its former political boss, Martin Cullen (now retired). This may also have to be written off, as the move is another of those "deferred".

Next up is Mullingar, where a site of 5.3 acres was bought in 2007 for €8.25 million - €1,556,604 per acre - to accommodate a new headquarters for the Department of Education and Skills. Nearly 300 staff were due to to be moved there from Marlborough Street in Dublin. But with only seven in place, this has also been "deferred".

Fifth on the list is Trim, where the OPW itself is now headquartered in a circular building on the edge of the town centre, with a 340-space multi-storey car park alongside. The 2.7-acre site was bought in 2006 from Trim Town Council for €3.6 million, the building cost was €21.6 million (net of fees, Vat, etc) and 238 of an expected 334 staff are now working there.

On site acquisitions, of course, the OPW was a sitting duck. Charlie McCreevy, then minister for finance, had announced all the locations in December, 2003. "We were saddled with the locations and had no room for manoeuvre at all," said a well-placed source.

Within weeks of the announcement, some 700 sites had been inspected, evaluated against a range of criteria and later excluded or shortlisted for a second inspection. "If only one site was available in a particular town, we had to accept it. We couldn't say we'd go to the next town, because we didn't have that option."

The source said there was "no overt political pressure to buy particular sites, but there was pressure to meet timescales and get buildings finished and occupied".

In one case (Roscommon), a flood-prone site was bought. The €8.9 million building built there "doesn't flood, but the access road built by the local authority does".

At the cheaper end of the scale, the OPW managed to acquire a six-acre site near Knock airport for just €65,000 per acre. This was earmarked for the headquarters of the Department of Community, Equality and Gaeltacht Affairs, and plans were well advanced - even going to tender - when the project was stopped by the Department of Finance.

A review followed, with the OPW recommending an alternative site in nearby Charlestown, but this didn't proceed either and the project is now on hold. In the meantime, an "advance party" of 100 from the department is being housed in temporary offices in Tubbercurry, Co Sligo, that cost €321,000 to fit out, plus annual rent of €88,000.

Temporary accommodation (with total fit-out costs of €5 million-plus) is also being rented in Athy, Carlow, Cavan, Claremorris, Dundalk, Portarlington, Portlaoise, Roscrea and Thurles to accommodate advance parties from other departments and agencies whose ultimate relocation is under review. The combined rent is costing €1.36 million per year.

In some of these cases, land purchases might also have to be written off. These include a 1.1-acre site in Carlow bought for the Department of Enterprise, Trade and Innovation for €1.44 million in 2005, and an 11-acre site in Cavan that cost €2.9 million in 2006 that was earmarked for the Department of Communications, Energy and Natural Resources.

Also in doubt is the future of sites in Claremorris (2.7 acres bought for €2.5 million for OPW); Dungarvan (three acres for €2.1 million for the Ordnance Survey); Edenderry (two acres costing €1.5 million for NQAI, Fetac and Hetac); Thomastown (three acres costing €1.8 million for the Health and Safety Authority); and Thurles (six acres costing €967,500 for Garda offices).

Both the Garda Fixed Charge Processing Unit and Central Vetting Office are in temporary leased premises (rent €252,440 per year) in a Thurles business park, pending construction of a purpose-built office block to house 200 staff. Although still listed "to be reviewed in 2011", an OPW spokesman said "approval has been given to proceed with this project".

In Portlaoise, a nine-acre site was bought in 2007 for just over €1 million, a relatively modest €112,556 per acre, on which the Department of Agriculture's future headquarters is to be built. In the meantime, three leases for "temporary interim accommodation" to accommodate 317 staff already transferred there are costing €530,640 per year.

Three long-term leases were negotiated in Ballina to provide 2,780sq m (30,000sq ft) of office space for the Road Safety Authority's 62 staff, at a combined annual rental of €394,828, plus fit-out costs of €2,462,662 (€886 per square metre).

A further 40 staff are accommodated in Loughrea in another leased building that costs €139,235 per year in rent.

New offices for 52 Revenue staff in Listowel are leased for €183,000 per year, in addition to fit-out costs of €1.35 million. Another outlying branch of the Revenue, with 57 staff, is housed in much smaller building in Kilrush that costs €85,050 per year to rent on a long-term basis and needed €411,000 to fit out (a modest €703 per square metre).

The most expensive long-term lease - €800,000 per year - is being paid in Carrick-on-Shannon for offices for 159 staff from the Department of Social Protection. Fit-out cost €4.33 million, or €1,166 per square metre. Phase one of this move is said to be "complete", but transfer of a further 90 staff has been "deferred".

Office developers in Navan have also done well. A building housing the property regulator's nine staff and a further 100 from Revenue is being leased for €575,360 per year (in addition to fit-out costs of €2.1 million) while another block that houses sections of the Department of Justice costs €440,000 per year in rent; the fit-out there was €3 million.

In Tipperary, planning permission was recently granted for a purpose-built office block to house 186 staff from the Department of Justice.

The 6.5-acre site was bought in 2006 for €1.62 million and, pending construction of the new building, another has been rented in the town to accommodate 63 staff at a yearly cost of €103,958.

In Tullamore, heartland of Taoiseach Brian Cowen's Offaly base, aoffice block was bought by the OPW for just over €10 million (including fit-out) to provide new working space for 130 staff from the Department of Finance. Needless to say, this move is now listed as "complete"; given the location, it could not have been in any doubt.

Cowen's constituency colleague Tom Parlon, then minister of state in charge of the OPW and now director-general of the Construction Industry Federation, claimed in January 2004 that the "decentralisation" programme could even be "self-financing" on the basis that the State would be able to raise a lot of cash from selling properties in Dublin.

Initially, the prospects looked good. Parlon was delighted when a one-acre site off Baggot Street was sold for €22.5 million the following month and even more thrilled when the mid-1960s Department of Justice office block on St Stephen's Green fetched €52.3 million in mid-2004, netting a profit of nearly €16 million; it had been bought in 2000 for €36.5 million.

But any notion that the State could dispose of such important historic buildings as the Custom House, the Department of Defence headquarters on Infirmary Road (both designed by James Gandon) or the Department of Education's headquarters in Marlborough Street was clearly not realistic.

At the time, rents paid by the Government for offices in Dublin came to €100 million; not having to pay such a large bill would free significant funding for "decentralisation".

But Fás warned that it could be left paying over €5 million per year in rent for empty Dublin offices if it relocated to Birr because leases still had years left to run; it stayed where it was.