Gilmore concedes €10m bill for unfinished estates unlikely to be repaid

Tánaiste Eamon Gilmore has conceded the Government is unlikely to recoup the €10 million it is spending on cleaning up housing estates left unfinished by builders who went bust during the recession.

The Coalition has committed €10 million of taxpayers’ money to build roads, install drains, put up street lighting and provide other necessary public services in housing estates where building companies failed to complete this work because they were wound up.

Speaking at the launch of the Government’s construction industry strategy yesterday, Mr Gilmore agreed this money had in effect been lost because the building companies that should have done the work in the first place “no longer exist” and could not be pursued.

The Tánaiste said that, at the same time, the Coalition could not leave those who bought homes in such estates without necessary services. “We had to step in,” he said.

Planning laws and construction regulations require builders to provide these services and to put up insurance bonds to ensure the work can be paid for in the event they are unable to do it.

Worthless bonds
However, it emerged after many companies were wound up during the recession that the bonds were worthless or not adequate to cover the work that needed to be done.

Most firms had sold the houses in the developments where they failed to complete the work. The people who bought them had moved in and were living in estates without proper public services.

Despite this, the Government intends to cut the level of bonds that building companies will need to put up for contracts where the State hires them, as the cost of providing the insurance required is high and the administration believes this is hindering the sector.