Average cost of modular homes for Ukrainian refugees increases to €442,000

This is an increase of the initial €200,000 per unit that had been estimated by the Department of Integration to build 500 modular homes in June 2022.

The proposals were brought forward in response to the Russian invasion of Ukraine and the subsequent arrival of tens of thousands of Ukrainian refugees into Ireland.

An initial budget of €100m was approved, with the expected delivery of modular units by the end of February 2023. This soon increased to €140m as of November 2022, with the Office of Public Works (OPW) citing contractor costs and Vat for the increase.

Costs further escalated in January 2023, rising to €155m and increasing the cost per unit to an average of €310,000.

While the department had initially sought 500 units, this was increased to 700 in July 2023, before later being scaled back to 654. The total amount of people expected to be accommodated in the modular units stands at 2,640.

The revised plans for 700 units further increased the costs, going to an average of €339,000 per unit.

Formal submissions for the updated plan in July 2023 envisaged the modular homes would not be completed until the first quarter of 2024 — a year later than initially expected.

“[The Department of Integration] stated that other factors contributing to the increased budgeted cost included project-specific price increases; and wider economic and inflationary measures, such as supply chain difficulties and energy cost increases,” the C&AG report reads.

In the six months between July 2023 and January 2024, the overall cost of the project was revised on four occasions.

The report says the department claimed the cost revisions were due to the “emergency nature of the programme”, as sites were only made available as the programme unfolded.

It says the OPW informed the department a “worst-case scenario” was that the programme would cost €300m by the end of 2024 — an average cost of €432,000 per house.

However, the latest estimates from the department of Integration are that the project will cost €289.3m, leading to the average cost of €442,000 per unit.

Meanwhile, the Department of Housing has spent up to €1.56m in professional fees on top of exceptional funding of €15m since last December, relating to issues at the Peter McVerry Trust.

The report sets out controls regarding funding provided to the trust have not been “operated as expected” by the department.

It noted: “The department’s key controls in respect of the funding it provides to the DRHE (Dublin Reginal Housing Executive) to support the trust comprises of the DRHE submission to the department of quarterly financial reports, which it reviews; and random spot checking of invoices submitted for payment. However, these controls have not operated as expected.”

In particular, it said one spot check was initiated by the department on expenditure by the trust in the first quarter of 2022, but the DRHE explained that this could not be done in then.

The department did consider checking invoices for the following quarter but did not do so.