Ukrainian Modular Homes Cost Doubles

The construction of temporary modular homes for Ukraine refugees, as well as other temporary protection beneficiaries, is anticipated to exceed twice the initially projected cost per unit, according to findings from the nation’s expenditure auditor. On Monday, the Comptroller and Auditor General (CAG) published a report, stating that previously, they had estimated a €200,000 cost per residential unit, which was expected to rise to an average of €442,000. This implies a surge of almost 120% by June 2024.

Nonetheless, the Comptroller’s report indicated that the latest estimates from the Department of Children, Equality, Disability, Integration and Youth suggest cumulative project costs of €289.3 million. The plan was initially to build 500 modular units, but this figure has since oscillated, peaking at 700 in July 2023 before falling to 654 a year later. The project’s anticipated finish date has also been deferred from February 2023 to April 2025.

The report reveals that the government opted to initiate a pilot scheme for the fast construction of modular units as one of the strategies following the invasion of Ukraine by Russia in April 2022. The Office of Public Works (OPW) drew up proposals for a “proof of concept” scheme involving building 500 modular units dispersed across 20 potential sites, with the capacity to house 2,000 individuals by February 2023’s close. The capital cost expected for this was €100 million, or €200,000 per unit. This pilot “proof of concept” plan received government approval in June 2022.

In a fresh analysis of expenditure, the Office of Public Works (OPW) identified in January 2023 that the predicted cost of project implementation had escalated significantly to in excess of €155 million. This was an uptick of 55 per cent from the initial projected cost, averaging to €310,000 per establishment.

The bulk of the surge in cost from November 2022 till January 2023 was attributed to the projected overheads for the site development activities. These had experienced an average increase of about €18,000 per establishment during the specified timeline. The OPW disclosed that this was chiefly due to the revelation that some of the proposed sites turned out to be smaller than what was originally proposed, with each site only able to accommodate fewer than 30 establishments. Furthermore, there were considerable, unforeseen irregularities with the site conditions.

The OPW projected, in January 2023, a total expenditure of €237 million for the development of the 700 establishments. This implies an average unit cost of €339,000, marking a 70 per cent surge from the initial average unit cost of €200,000. The government granted formal approval for the revised plan and the supplementary cost in July 2023, seven months post the instruction given by the OPW to the chief contractor to procure the additional establishments. The Department of Public Expenditure only approved the escalated expenditure in September 2023.

Between July 2023 and January 2024, the Comptroller’s analysis revealed that the estimated overall project delivery cost underwent several revisions, at least four.

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