‘The Money Pit’ | 5 pyrite homes re-mediated at a cost of €2.2m.

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 05 February 2015

The Minister of State at the Department of the Environment with Special Responsibility for Housing, Paudie Coffey T.D., announced earlier today that he has approved the extension of the pyrite remediation scheme to include dwellings located in the administrative areas of Dun Laoghaire-Rathdown and South Dublin County Councils which may be affected by significant pyritic damage. This follows on his advice to the Dáil last week of the cost of pyrite remediation in 2014.

“Five houses were remediated last year as part of a pilot project costing €2.2 million. It is important, however, that we achieve economies of scale in providing a solution to the problem. The Government has committed funding to pyrite remediation works, with a sum of €10 million allocated in 2015……..The primary responsibility for those problems rests with the builders who cannot be let off the hook if they are found to have been in any way negligent.”

For full Dáil discussion click here: Pyrite Remediation Programme: 28 Jan 2015

The inflated figure of costs appears to be top-loaded with the cost to date of administration for houses approved for works. With a previously estimated remediation cost per house at €66,000, the actual building costs for remediation of 280 houses planned for 2015 could be in excess of €18m. The budget allocated may be less than half that actually required.  Based on pilot study costs to date, administration of the scheme may be over €7,000 per house excluding any physical repair works. This would mean the cost to administer the scheme for the estimated 12,000+ homes affected could be close to €100 million before any actual repair work is carried out if all the properties identified to date were included. However the eligibility for the remediation scheme is ‘last resort’ so it is unlikely 12,000+ will be included.

This is just the tip of the iceberg for the potential cost of pyrite damage to the Irish taxpayer and builders are not the source of this problem. It is extraordinary that the suppliers of pyrite contaminated material have still not been held liable for pyrite contamination in building products. The responsibility for such defective building materials should be left clearly at the gates of the quarry where sample testing can be carried out in an economical manner. Under SI.9 Building Control Regulations an Assigned Certifier will now have to certify Part D (Materials & Workmanship) and sign off on, and assume the risk for pyrites. Given that no additional resources have been allocated to Local Authorities to police materials, we can assume pyrite as a problem will continue to affect construction.

Most Assigned Certifier’s Professional Indemnity Insurance (PII) policies currently exclude such claims. With such a weak system of redress, the next building failure will inevitably fall back on the tax payer again. Why continue with a system that has little or no independent Local Authority Inspections or where liability is not fairly apportioned? Can the taxpayer afford to pay out multiples of the cost of an independent system of building inspection?

Notes:

  • The Pyrite Remediation Scheme EXCLUDES work from 2014 so SI. 9 cannot be covered. Applications are still being accepted so there may be even more. The SCSI correctly predicted that the eventual figure could be more than 10,000 homes may be affected by pyrite contamination (source: SCSI- see note below).
  • Based on these figures, to date, 12,250 homes may cost in the region of €894m.
  • 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.

Other posts of interest:

Pyrite: the spiraling cost of no Local Authority Inspections

PII Insurance increase under SI.9 with no cover for pyrite?

Pyrite legal dispute referred to European Court | Independent 

S.I. 9 and Insurance Claims: Deirdre Lennon MRIAI

“The insurance will sort it out…”

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

Pyrite & SI.9- what happens now?

RTÉ News: Louth housing scheme to be demolished over pyrite

Dáil : Pyrite Remediation Programme: 10th June 2014

Government Reports & Professional Opinion Ignored in S.I.80

Clear and auditable trail: consumer protection? BC(A)R SI.9

HomeBond ‘snub’ over pyrite ‘a matter of serious public concern’ – Committee

1 thought on “‘The Money Pit’ | 5 pyrite homes re-mediated at a cost of €2.2m.

  1. Rp McMurphy

    so 2.2 million / 5 = a 440,000 cost per house to rectify the original cost saving / corner cutting decisions per dwelling amounting to a guesstimate of ….5000 euros maybe? . Why spend an extra 5k or 10k getting it right the first time when you can create a gravy train in future

    an unintentional byproduct of this is that the figures quoted are a resounding result for all those Vested Interests who wish to maintain the status quo

    – an Environment where house price hyperinflation is supported , and exorbitantly high property prices and build costs are maintained in comparison with other developed countries.

    by house price Hyperinflation I refer to the additional cost post 2007 of upgrading homes to comply with regs.

    Build cost for modest home pre 2007 – say 150k + Inflated Site cost of 100k + ‘Deckland’ Seller’s ‘Wishful Thinking Premium’ of 200k = 450k . Add estimate of 100k upgrading costs to comply and relist 1200 sq ft home for some silly sum of 600k+

    Somewhere in that sum is the real rational fair value of 200-300k based on 3.5 times combined salaries

    Reply

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