Modular homes built for Ukrainian refugees projected to cost €442,000 each, damning report on OPW spending finds

Costs have risen sharply for the ­housing programme that was supposed to save the State money instead of ­paying for hotel rooms to house refugees ­fleeing Russia’s invasion of Ukraine.

As part of the OPW-led project, 500 modular homes were to be rapidly built to house 2,000 beneficiaries of “temporary protection”.

Because of the urgency of the situation, a proper “value for money” investigation or cost-benefit analysis was not carried out. The original projected cost was €100m, but is now expected to cost €289.3m, according to the report published yesterday.

It sets out a catalogue of changes, including an increase in the targeted homes to 700, before it fell back to a lower revised figure.

There will be a further huge cost, as the BER home-energy rating for the units was expected to be A2, but was instead found to be at the C1 level.

All of the homes will now have to be upgraded, adding to the cost of the project. The OPW is already in hot ­water over the €336,000 Leinster House bike shed and a €1.4m security hut at the Department of Finance.

The C&AG report said the delivery of the first 500 modular units by the end of February last year was felt to be an ambitious but achievable timeframe.

However, this rate of delivery was only achieved last month, 17 months later than planned.

In addition, “significant project cost overruns have occurred,” the report said.

The initial projected cost was an ­estimated €200,000 per residential unit, but this had increased to an ­average of around €436,000 by last June.

The overrun was “an increase of ­almost 120pc,” the report said.

It added there are now indications of “a final projected average cost per unit of around €442,000”.

A significant factor in the increased cost and delays was the lack of availability of suitable sites. Three-quarters of the considered sites were rejected, with the situation made worse by insufficient provision for site preparation works.

“The lack of a definitive schedule of sites at the outset added considerably to the cost and timeframe of the programme, including the need to hold some units in storage,” the report said.

Up to last June, storage costs of around €310,000 had been paid, because the units could not be put in.

In April 2022, two months after the Russian invasion of Ukraine, the OPW developed proposals for a pilot programme for Roderic O’Gorman’s Department of Integration. The Government approved the development of 500 modular units across 20 potential sites, to accommodate up to 2,000 people.

The roll-out of the programme was classified by the Government as a ­“matter of extreme urgency” for procurement purposes, due to the need to deliver the modular units within a tight timeframe, the report said.

“The OPW procured the main contractor for the project using the negotiated procedure without prior advertisement,” it added.

In July last year, the Government expanded the programme to accommodate up to 2,800 people.

The original design, for single-storey units to accommodate four people each, would require 700 units.

A plan was developed for a small number of two-storey units to accommodate six people each, and the number of individual units required was adjusted to 694.

But last February, as the cost situation worsened while the influx of Ukrainian refugees eased, Mr O’Gorman agreed to reduce the planned delivery to 632 units.

This number has since crept up to 654 units to accommodate up to 2,640 people by next April.