Dublin City Council has said contracts for a €20 million house-building scheme in Finglas did not need to be advertised in the European Journal because the scheme was a co-operative effort between the city and a housing agency.
Contracts for the construction were given to Kildare company Affordable Modern Dwellings Limited (AMDL), which collapsed recently with debts of up to €2 million.
Under normal circumstances any public contract worth more than €5.9 million should be advertised in the European Journal.
Although the council financed the building of the houses and provided the land as well as offering mortgages to prospective buyers, a complex arrangement with the non-profit housing agency Tógáil effectively meant the council was not the developer of the estate.
As such the council said it did not sign any agreements with the builder and had no responsibility to advertise a tender in the European Journal.
Instead the council effectively gave the land at Scribblestown Lane, valued separately at about €15 million, to Tógáil. The council also borrowed the construction cost of about €20 million from the housing finance agency to cover the construction of some 110 new homes and this money was used to make payments to AMDL as building progressed.
Tógáil, which has been involved in several partnerships with local authorities, working for the creation of affordable housing, contracted with the builder. In a second phase of the scheme, the council borrowed mortgage finance as part of its normal operations in offering mortgages to people on its affordable housing list. As people signed on for a mortgage, the money was used to repay the housing finance agency loan, plus charges and interest.
About 30 homes are currently occupied under the complex arrangement, with three-bedroom houses with gardens becoming available for about €180,000.
Assistant council manager Brendan Kenny, said a new builder was being sought to finish the estate and it would be completed as intended. Mr Kenny said the arrangement with Tógáil was because it could get a better deal from builders than the council.
