How direct provision became a profitable business

It was introduced to meet the needs of vulnerable asylum seekers. But private firms, rather than those seeking refugee status, appear to have been the main beneficiaries of the direct provision system.

In April 2000, the State decided to pay private contractors to provide accommodation for asylum seekers in hostels, hotels, convents, bed and breakfasts and mobile homes.

Many of the companies providing food and shelter are large firms involved in the property, hospitality or catering business.

In all, there are 17 firms which receive about €50 million a year to run 34 accommodation centres across the State, providing for about 4,000 asylum seekers.

A glimpse inside their accounts show that many are highly profitable and have recorded six or even seven-figure pre-tax profits.

Some larger companies have moved to shield their accounts from public scrutiny by creating unlimited companies, often with parent firms in off-shore jurisdictions. This means it is impossible to calculate how much money they are making from the system.

But it is possible to paint a picture of the profitability of the companies that have not registered themselves as unlimited firms by combing through accounts filed with the Companies Office.

Of companies with published accounts, Fazyard Ltd has the biggest accumulated profits: €10.8 million.

It is linked to three centres which provide accommodation for 500 asylum seekers in Emo, Co Laois, Clondalkin in Dublin and Georgian Court in Dublin's north inner city. The firm, owned by Co Wicklow businessman Sean Lyons, made a profit of almost €800,000 in the year to the end of November last.

Mosney Holidays

The biggest recipient of public funding is Mosney Holidays plc, which has been paid more than €100 million for accommodating up to 800 asylum seekers at the former Butlin’s holiday resort in Co Meath.

Its last published accounts, in 2009, show accumulated profits at the end of the year of €5.4 million. The following year it became an unlimited company and so does not publish its accounts. It is owned by an Isle of Man company called Sonning Unlimited.

During 2009, Mosney made a €4,050 contribution to Fianna Fáil, according to the accounts.

One source involved in tendering for work said many of the contracts make significant sums of money because they are “wrap around” arrangements, where the service provider prices for a range of services under a single contact.

Any firms contacted by The Irish Times have declined to comment. They are required to direct all media inquiries to the Reception and Integration Agency (RIA), a division of the Department of Justice.

The agency insists that centres are obliged to meet high standards and are inspected regularly.

All firms are required to go through a tendering process and are contractually obliged to have valid, current tax clearance certificates. The agency says it cannot provide details of individual contracts for commercial reasons.

However, last year it provided figures which showed the average daily rate per person paid to private contractors ranges from €15.50 in State-owned centres to €29.49 at commercially- owned centres.

The direct provision rate for private operators is a single all-inclusive figure, which includes energy, maintenance, transport and Vat costs. By contrast, the State-owned rate does not include any of these costs.

In a statement, the agency said it took a number of steps to ensure accommodation is of a high standard.

“RIA constantly engages with its contractors to ensure that value for money is being achieved and that the contractor is complying with standards of accommodation, bed-usage, health and safety etc, as set out in contracts and in other legal provisions.”

Complaints system

The agency, however, says it has a complaints system across all centres to address concerns by residents. It says there are a minimum of three inspections per year, carried out by the agency or by a commercial firm, QTS Ltd, under contract to the agency.

The agency has acknowledged that inspection can only be a “snapshot” of the physical conditions in the building, but added that all issues brought to RIA’s attention were investigated and remedied.

However, the small number of complaints suggest residents have little faith in a complaints process which is not independent of the State body providing accommodation in the first place.

Many of the centres have been at the centre of high-profile protests by residents frustrated at both the conditions and length of stay in these centres.