The €64,000 question: How big is the pyrite problem?

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The € 64,000 question: Is it really cheaper to have no regulation?

The BRegs Blog was asked about the scale of the pyrite problem by a reader and we have attempted to establish some ballpark figures for the cost of some of its remediation as follows:

  • There have been 520 applications so far to the Pyrite Remediation Scheme (source: Dáil statements 16th July 2014- see link below)
  • The first 50 homes cost €3.2 m so this indicates an average cost per home of €64,000 each (source: Irish Times article 19.08.2014- see link below)
  • The Pyrite Remediation Scheme EXCLUDES work from 2014 so S.I. 9 cannot be covered. Applications are still being accepted so there may be even more. The SCSI suggested that the eventual figure could be almost 20 times this figure i.e. more than 10,000 homes may be affected by pyrite contamination (source: SCSI- see note below) 
  • Based on these figures, to date, 520 homes may cost in the region of €33,280,000

In excess of €33 million of taxpayers money will have to be spent to fix one instance of a defective building product (for the 520 applications to date)! In addition the scheme only covers foundations in homes where there is no other means of redress e.g. where insurers refused to pay out or the builder has gone bust. It also excludes pay-outs made by private sector insurers to date for pyrite remedial works.

Local Authorities are responsible for market surveillance of building products. However they only react to problems as they arise as they do not have adequate resources to proactively police quarries and suppliers. That may be considered acceptable, for now, because under the new building regulations introduced in March 2014 an Assigned Certifier will now certify Part D (Materials & Workmanship) and sign off on, and assume  the risk, for pyrites .

Assigned Certifiers may think that their Professional Indemnity Insurance (PII) policies will pay for such claims. One PII policy will never stretch to the scale of another material problem like pyrite* or even a single building like Priory Hall** that will cost in excess of € 27 m** to rectify. With such a weak system of redress, the next building failure will inevitably fall back on the tax payer. Would it not be better to invest in better regulation of the supply and manufacture of building materials?

*Pyrite remediation at €64,000+ per house and there could be up to 10,000 pre-2012 properties affected (up to €640 million).

** Priory Hall refurbishment at €140,000+ per apartment (at least €27 million).

Sources mentioned in the above post:

Pyrite Remediation Programme…: 16 Jul 2014: Seanad debates (KildareStreet.com)

Irish Times, August 19th 2014: 6,000 social housing units to be provided this year

Irish Times, August 1st 2014: Supreme Court makes final Priory Hall orders (185 apartments at estimated €27m for repairs)

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Other posts on this topic:

Are Design and Assigned Certifiers risking professional suicide with Pyrite and S.I.9?

Was pyrite discovered in concrete blocks in 2013?

Pyrite & SI.9- what happens now?

The cost of a Solution to BC(A)R SI.9? 

Pyrite News roundup- week ending 13th June

0 thoughts on “The €64,000 question: How big is the pyrite problem?

  1. Michael O'Neill

    I’m reminded of Brian Cowen’s alleged comment that the Department of Health was “like Angola”.

    Many people were disgruntled at hearing this apparent insult to our glorious Health Service, but apparently all Cowen meant was that you never knew when you would step on a landmine.

    The state of materials approval generally, and quarry regulation generally, in the industry means that certification of any component or material is fraught with risk.

    Fraud and / or incompetence is stalking the Assigned Certifier, whenever he signs off in good faith on goods or services which may be tainted by the criminality or negligence of others – the Certifier “takes the rap”.

    For Certifiers, the Construction Industry has thus become the New Angola, with the terrible vista that, unlike former Health Minister Cowen, the Certifier is criminally liable for any bombs that go off.

    Who has destroyed our industry like this? A Minister for the Environment who – unlike the Assigned Certifier – carries no accountability in this matter whatsoever and couldn’t care less as he is on his way to Europe.

    Reply
  2. Michael O'Neill

    I’m reminded of Brian Cowen’s alleged comment that the Department of Health was “like Angola”.

    Many people were disgruntled at hearing this apparent insult to our glorious Health Service, but apparently all Cowen meant was that you never knew when you would step on a landmine.

    The state of materials approval generally, and quarry regulation generally, in the industry means that certification of any component or material is fraught with risk.

    Fraud and / or incompetence is stalking the Assigned Certifier, whenever he signs off in good faith on goods or services which may be tainted by the criminality or negligence of others – the Certifier “takes the rap”.

    For Certifiers, the Construction Industry has thus become the New Angola, with the terrible vista that, unlike former Health Minister Cowen, the Certifier is criminally liable for any bombs that go off.

    Who has destroyed our industry like this? A Minister for the Environment who – unlike the Assigned Certifier – carries no accountability in this matter whatsoever and couldn’t care less as he is on his way to Europe.

    Reply

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