Committee Reports::Report No. 17 - Proposed Department of Defence/Army Headquarters::26 September, 1986::Appendix

Appendix II


Proposed Department of Defence and Army Head Quarters Project.

The Dail Committee on Public Expenditure has requested information from the Department of Finance, the Office of Public Works and the Department of Defence On the proposed expenditure of £20 million on the above project.

It has sought independent advice on the cost of building and fitting out office accommodation and the state of the office market in Dublin and it has invited the officials of the Department of Defence, Army Personnel and OPW Officials to give evidence before the Committee.

On the basis of the information thus provided to it the Committee offers the following comments on the proposal.

1.There is clear evidence that the existing Department and Army Headquarters is inadequately maintained and in an entirely unsatisfactory condition. It is understood, however, that the building may be the subject of a preservation order imposing responsibility on someone and ultimately on the Exchequer to restore and maintain the building. This in itself has major cost implications which have not been taken into account in the consideration of this project.

2.No clear evidence of any economies or efficiencies was offered to justify the concentration of the Department of Defence and Army Headquarters into one new office complex.

3.The suggestion that the new project be funded privately could only have merit if it was decided that the Exchequer had reached the limit of its normal borrowing capacity. In that case the project should, in any event, not be proceeded with.

4.All the evidence available to the Committee suggests that it would be difficult and expensive to arrange for long term private funding for such a project on the basis of a margin over inter bank rates as the funding agencies would have greatly reduced liquidity and therefore would require a higher margin than would apply if they simply held Government stock in the normal way. In any event, the Exchequer and ultimately the taxpayer takes final responsibility for meeting the liabilities arising from the project and it will have to be funded entirely by borrowing and hence by future taxes.

5.In present market conditions it is substantially cheaper to buy than to build office accommodation in Dublin and the option of leasing is cheaper still in the short to medium term.

6.The Committee considers that before the project is submitted for Government approval for expenditure beyond the tender stage all the alternatives to building a new 20,000 square metre complex should be considered as should the alternative use of the Parkgate Street and Colaiste Caoimhin premises.

7.In particular the following options should be considered.

- replacing the Parkgate Street premises with an alternative accommodation for the existing Headquarter staff in the same location through purchase or lease making adequate provision for security and special requiremtnts.

- Building a replacement for the Parkgate Street site only on the proposed site. This will undoubtedly be more expensive than the first option but may be considered necessary on security grounds.

- Leasing or purchasing an existing office complex capable of housing the full Department of Defence and Army headquarters staff. There is at least one such property available on the market in a suitable location in Dublin.

- Refurbishing the existing Parkgate Street Premises to render it suitable.

8.In any event a provision of £20 million is simply too much to provide office accommodation for less than 900 people and is considerably in excess of the outlay which a commercial organisation could undertake for this purpose. It is even more excessive when considered in today’s market conditions for Dublin office accommodation.

9.Furthermore since the need is acute only in the case of 270 of the 200 staff involved the Committee considers that a more cost effective alternative must be found to providing an adequate headquarters for the Department of Devence and the Army.

10.Finally, the Committee wishes to record it concern that the provision of satisfactory Headquarters for the Department of Defence and the Army have been postponed for so long and expresses the hope that everything necessary will now be done to provide the most cost effective means of replacing or renewing the Parkgate Street premises providing for the alternative means of disposal of any accommodation that might thus be made redundant.