Politics

Cost of modular homes for Ukrainians doubled to €442,000 each, CAG report finds

It was initially envisaged such residential units would cost €200,000 each

Modular homes being prepared for Ukrainian refugees in Mahon, Cork, in June 2023. Photograph: Michael Mac Sweeney/Provision
Modular homes being prepared for Ukrainian refugees in Mahon, Cork, in June 2023. Photograph: Michael Mac Sweeney/Provision
Martin Wall
Mon Sept 30 2024 - 13:00

The cost of developing modular homes for Ukrainians and other beneficiaries of temporary protection will end up costing more than twice as much per unit as originally envisaged, the State’s spending watchdog has found.

In a report on Monday, the Comptroller and Auditor General (CAG) said the initial projected cost was an estimated €200,000 per residential unit.

This had increased to an average projected cost per unit of about €436,000 by June 2024 – an increase of almost 120 per cent.

However, the Comptroller’s report said the latest projections of the Department of Children, Equality, Disability, Integration and Youth indicated total costs for the project of €289.3 million, indicating a final estimated average cost per unit of about €442,000.

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Under initial plans, 500 modular units were to be developed, but this number fluctuated over subsequent years – increasing to 700 in July 2023, before being scaled back to 654 in July 2024.

The planned completion date for the project also slipped from February 2023 to April 2025.

The report said that, in April 2022, following the Russian invasion of Ukraine, the Government decided, among other measures, to undertake a pilot project to develop rapid-build modular units to provide accommodation.

The report said the Office of Public Works (OPW) developed proposals for a “proof of concept” programme which would involve the development of 500 modular units across 20 potential sites. These would accommodate up to 2,000 people by the end of February 2023.

Source: Office of Public Works. Department of Children, Equality, Disability, Integration and Youth.

The report said it was envisaged there would be a capital cost of €100 million, or €200,000 per unit.

The pilot “proof of concept” programme was approved by the Government in June 2022.

“A further review of costs by the OPW in January 2023 identified that the estimated delivery cost had increased to just over €155 million – a 55 per cent increase on the original estimate. This represented an average cost of €310,000 per unit.

“Most of the increase between November 2022 and January 2023 was attributed to the projected costs for site development works which had increased by an average of approximately €18,000 per unit during that period. The OPW stated that this was primarily because some of the sites proposed turned out to be smaller than originally envisaged, with capacity for fewer than 30 units, and with significant, unexpected, abnormal site conditions.”

[ Homes hosting Ukrainian refugees quadruples with costs rising to €13m a month ]

“In January 2023, the OPW estimated the cost of delivering the 700 units at €237 million. This represents an average unit cost of €339,000 – 70 per cent higher than the original estimated average unit cost of €200,000.

“Formal approval for the revised output and the additional cost was not sought or received from Government until July 2023, seven months after the OPW had instructed the main contractor to acquire the additional units. The Department of Public Expenditure did not sanction the increased expenditure until September 2023.”

The Comptroller’s report said that between July 2023 and January 2024, the estimated programme delivery cost was revised on at least four occasions.

Martin Wall

Martin Wall

Martin Wall is the Public Policy Correspondent of The Irish Times.