The Office of Public Works Capital Review 2018 to 2022

 
The Office of Public Works Capital Review
               2018 to 2022
The Office of Public Works Capital Review Plan 2018 to 2022

Contents

List of Tables .......................................................................................................................................................... 3

Summary................................................................................................................................................................. 4

Introduction ............................................................................................................................................................ 8

Flood Risk Management ....................................................................................................................................... 12

Estate Management............................................................................................................................................... 21

Support Projects and other investment funding on Estate Management & Flood Risk Management .................. 40

Sample of Potential Risks & Opportunities to Capital Works and Investment of the OPW................................. 44

Appendices ........................................................................................................................................................... 49

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The Office of Public Works Capital Review Plan 2018 to 2022

List of Tables
Table 1 Additional Capital Requirements 2018 to 2022......................................................................................... 5

Table 2 Investment Outturn and Requirements 2016 to 2022 ................................................................................ 9

Table 3 Additional OPW Capital Requirement by Proposal ................................................................................ 10

Table 4 Other Capital Requirements .................................................................................................................... 11

Table 5 OPW Approach to Flood Risk Management ........................................................................................... 13

Table 6 Government Priorities and OPW Actions (FRM) .................................................................................... 18

Table 7 Estate Management within the OPW ....................................................................................................... 22

Table 8 Capital Investment in EM 2016 ............................................................................................................... 23

Table 9 Investment in New Works 2016 .............................................................................................................. 23

Table 10 Current Portfolio mix Vs Projected mix ................................................................................................ 29

Table 11 Square Meter of Lease Space Expires 2017 to 2022 ............................................................................. 29

Table 12 Capital Investment in Heritage Services 2011 to 2016 .......................................................................... 33

Table 13 Government Priorities and OPW actions (EM) ..................................................................................... 36

Table 14 Summary Benefits ................................................................................................................................. 39

Table 15 Purchase of Sites and Buildings 2008 to 2016....................................................................................... 45

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     Summary

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Summary
The Office of Public Works (the OPW) is a service provider to the public and other Government Bodies and
carries out a lead role in the areas of Flood Risk Management and Estate Management on behalf of the
Government.

The work of the OPW is carried out by a professional and skilled workforce comprising up to 2,000 people, across
a wide urban and rural spread of the country and plays a central role in supporting the Government in achieving
key commitments contained in A Programme for a Partnership Government.

For the Office to plan and function strategically, a degree of funding certainty is required to allow a
comprehensive response through a medium to long-term framework for capital investment, supported by a
sufficient level of current funding. This certainty of funding has been committed by Government in the provision
of €430m to the Flood Risk Management programme in the 2015 Capital plan and is now required for the Estate
Management area to allow a comprehensive multi-annual approach to capital investment in the State’s owned
building portfolio.

This submission identifies certain re-prioritisation of allocations within Flood Risk Management and a
coherent framework of capital investment over the period 2018 to 2022, mainly on the Estate Management
Programme required to undertake work related to Government priorities and to ensure capacity to address
growing building fabric deterioration and health and safety issues. Additional capital investment of €50m is
required for Flood Risk Management (mainly related to Home Relocation measures) and €408.1m for Estate
Management, including €53.8m for investment in our Built Heritage.

Table 1 Additional Capital Requirements 2018 to 2022

                            2018           2019             2020               2021          2022           Total
                             €m             €m               €m                 €m            €m             €m

      Flood Risk            19.0            13.0             12.0               4.0           2.0           50.0
     Management

  Estate Management         41.1            69.8            115.8              98.7          82.7           408.1

         Total              60.1            82.8            127.8             102.7          84.7           458.1

Flood Risk Management (FRM)

A suite of structural and non- structural measures is being advanced to minimise the impact of flooding on
society, households and businesses. The delivery of structural flood defences is a critical element and the
Government has provided a funding commitment of €430m in the 2015 capital plan to deliver on this
responsibility. In summary terms, this review has found that the current structural programme for flood defences
is adequately funded over the term of the 2015 plan. However, an element of reprioritisation will be required
to ensure the capacity to meet the ambitious delivery timeframe set by Government in A Programme for a
Partnership Government and to adapt to the changing environmental circumstances and alternative solutions for
delivery being developed.

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In addition to the existing planned investment, it is anticipated that €102m will be required in 2022 to complete
the programme of works commenced under the 2015 plan. The Individual Property Protection Measures &
Voluntary Home Relocation Scheme are also proposed for inclusion in the revised plan. The Government agreed
in November 2016 to introduce a targeted scheme for residential homes where flood protection cannot be achieved
by feasible measures and will shortly consider a detailed plan to administer this scheme.

Estate Management (EM)

In managing the property portfolio, through the EM programme, the OPW are required to achieve appropriate
standards for the management of the State’s accommodation buildings with the parallel remit of conservation and
presentation of built heritage buildings. These standards cannot be achieved within the existing Vote
resources and will continue to deteriorate without an appropriate level of capital investment. Due to fiscal
constraints over the last number of years, overall funding to the OPW was reduced considerably and capital
investment in EM has largely comprised of minor projects, keeping buildings operational from a Health and Safety
perspective, compliant from a building regulation perspective and protecting the building fabric and valuation.
The consequence of this insufficient investment on the capital works programme has resulted in a deterioration in
the condition of a number of State properties within the OPW portfolio. The depletion of the asset value and
current condition of the properties are of major concern and must be viewed against the Government
commitment to improve utilisation, reduce costs and address the carbon footprint of the State portfolio.

The growing demands for public sector accommodation combined with the need to meet revised target space
norms, energy efficiency and reduced costs mean that investment in the owned portfolio is unavoidable. The
market pressures on the rental market in terms of price and capacity, which may be exacerbated by demand arising
from Brexit, are further external factors to be considered in providing the required investment. The proposals for
investment will facilitate the retrofit of older, inefficient and underutilised owned property. The expected return
on this investment includes a reduction in costs from lease avoidance and surrenders, increased utilisation in line
with the Property Asset Management Delivery Plan and a reduction in energy costs and potential EU fines. The
cost of not investing in the Estate could be very significant in terms of increased rent, but would also represent a
missed opportunity to house a significant section of the 35,000 civil servants in owned estate and control State
rents in the long term.

Heritage Estate

Commitment to invest in the Heritage portfolio is prominent in A Programme for a Partnership Government.
Proposals within this submission will focus on priority areas of the Estate, matching particular Government policy
ambitions such as the Tourism Development Plan 2016-2018, initiatives such as Creative Ireland and the Action
Plan for Rural Development to provide the necessary capital investment in the conservation and presentation of
heritage sites to the public. The recent growth in the tourism sector is reflected in the increased income received
by the OPW in recent years and the investment in this area to date has and will only continue to yield matching
returns to the Exchequer with sustained investment in the assets.

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In summary, this submission takes account of the key objectives of the OPW as the lead agency in Flood Risk
Management, the shared service provider for Civil Service accommodation and the caretaker of the majority of
State Properties. The proposals presented for capital investment, herein, will assist in facilitating the capacity of
all of Government to deliver on cross Departmental requirements identified in A Programme for a Partnership
Government.

It should be noted, however, that additional capital programmes identified by individual Departments may
place further demands on the resources available within this Office to deliver these programmes on an
agency basis. Any such additional demands will need to be aligned with the OPW capacity to deliver. In
addition, the OPW would request that the property impact of both current and capital proposals, arising
on foot of this review need to be considered as part of the wider investment and funding analysis.

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__________________________________________________________________________________

                                               Introduction

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The Office of Public Works Capital Review Plan 2018 to 2022

Introduction

The Capital Plan (the plan), published in 2015, outlined capital investment of €922m1 under two programmes in
the OPW:

     •    Flood Risk Management; and
     •    Estate Management.

The delivery of both programmes is ongoing for a number of years and the investment continues to contribute to
economic growth, environmental sustainability and social development in line with A Programme for a
Partnership Government. The wide geographical remit of the Office’s activities will ensure the OPW has a key
role in particular in the Action Plan for Rural Development and investment will have a direct social and economic
impact in every area of the country particularly in construction employment and associated services.

This submission comprises a review of capital investment within Flood Risk Management, the Estate Property
Portfolio and supporting infrastructure under the following main headings

     •    Expenditure and outcomes achieved to date from allocations received through the 2015 plan
     •    Reprioritisation of commitments for future years
     •    Additional plans and fund requirements for 2018 to 2022.

Table 2 Investment Outturn and Requirements 2016 to 2022

                        2016              2017           2018          2019          2020            2021           2022
                     Expenditure       Allocation      Proposed      Proposed      Proposed        Proposed       Proposed
                         €m                €m             €m            €m            €m              €m             €m

    Flood Risk           51.9*            45.0            89.0          93.0          102.0          104.0          102.0
    Management

      Estate             83.0             83.1           123.6         149.9          195.9          178.8          162.7
    Management

      Total              134.9            128.1          212.6         242.9          297.9          282.8          264.7
*Includes €7m carry over from 2015

Capital investment within the two main programmes amounted to €134.9m during 2016. The nature of this capital
investment within the Office is rich in job creation, targeted at critical infrastructure projects with a prompt return
on investment and supports a comprehensive approach by Government to a number of areas as outlined throughout
the review.

This submission focuses on providing information to assist in securing funds into programmes which increase the
likelihood of achieving the relevant commitments contained in A Programme for a Partnership Government. In
addition to the existing allocation for the period 2018 to 2022 an extra capital funding provision of €458.1m is
sought for the OPW Vote.

1
  The €922m includes €125m subsequently added to the plan for current unitary payments on the Convention Centre Dublin that were re-
categorised as capital.
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Table 3 Additional OPW Capital Requirement by Proposal

                               2018             2019            2020               2021           2022            Total
                                €m               €m              €m                 €m             €m              €m

         Total                 60.1             82.9            127.8             102.7            84.6           458.1

Note that the consequences or implications of the United Kingdom (the UK) leaving the EU has not been taken account of in
the above table as these have yet to be fully ascertained. The OPW has considered what risk this may have for the delivery of
the two primary work programmes of the Office but the full implications and any associated demands from client Departments
cannot be rationally estimated at this stage.

In addition to the capital investment outlined above are additional requirements of client Departments, which may
impact on the OPW.

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It is also important to note that the developments prioritised for investment do not represent an exhaustive
programme of building upgrade requirements. Buildings occupied by Government Departments and managed by
the OPW, yet vested in other State bodies, may require significant investment.

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                                    Flood Risk Management

                            Vision – To minimise the extent and impact of flooding.

Goals - To minimise the extent of coastal and river flooding and its social, economic and environmental impacts
   through the implementation of effective protection and mitigation measures for at-risk areas; the provision
    of flood risk guidance and advice in the area of sustainable planning; and assisting the development of
                                               resilient communities.

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Introduction
Flood Risk Management incorporates the development and implementation of comprehensive policies and
strategies for mitigating flood risk and the impact on people, property and infrastructure. Effective flood risk
management requires a short and long-term commitment and the adoption of both capital infrastructural and
non-infrastructural measures.
In planning and implementing the current Flood Risk Management plan, the OPW takes a multi-faceted approach
comprising actions to prevent and mitigate against flooding and protecting and responding where flooding occurs
as described below in Table 5.

Table 5 OPW Approach to Flood Risk Management

Flood risk management is a critical service of the OPW to the Public and the Government has provided a funding
commitment of €430m in the 2015 capital plan to deliver on this responsibility. It is imperative to the operation
of this service that this commitment is realised in a timely manner. This being the case, the review has found that
the existing structural programme for flood defences is adequately funded over the term of the plan. An element
of reprioritisation (see page 15) to ensure the capacity to meet the delivery timeframe set by Government in the
Programme for Government will be required and an extension of the annual commitment to invest in this area
beyond 2021.

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Progress Report 2015 Capital Plan to end 2016

The Government identified the importance of investing in flood risk management and committed €430m to be
invested in this area in the Capital Plan 2016 to 2021.

                                                                                              2021
                                                                                2020          €100m
                                                                    2019        €90m
                                                        2018        €80m
                                            2017        €70m
                                2016        €45m
                                €52m

This allocation provides for the preparation of flood relief schemes, the completion of flood relief works, the
funding of small works undertaken by Local Authorities under the Minor Works Scheme and the payment of
compensation costs arising from these works. It also provides for the carrying out of CFRAM studies as required
by the EU Flood Directive. To date, over 7,700 properties have benefited from major flood relief works with an
additional 6,153 properties benefiting from Local Authority projects funded from the OPW allocation. The
cumulative value of this benefit to properties, or loss avoided in economic terms is in the region of €1.5bn to date.

An example of the benefit of flood risk management arose in 2014 where the highest tide ever recorded in Dublin
City resulted in little or no damage. In the previous highest tide recorded, in 2002, approximately €60m of damage
was caused, mainly from flooding from the River Dodder, which is now protected from tidal flooding. Over 600
properties were flooded in the 2002 event, which are now protected from the subsequent scheme undertaken by
the OPW and Dublin City Council.

During 2016, the sum of €51.9m of this capital allocation was invested in flood risk management – Appendix 1.
The outputs from this spend resulted in four schemes been completed during 2015/2016. Currently, there are a
further ten schemes in progress, seven to commence in 2017 and twenty-four at design/planning stage.

KEY FACTS & FIGURES

          4                  Major flood relief scheme completed                     Standard level of flood protection
                                                                                     now at 417 properties

          6                 Major flood relief schemes where                         Standard level of floor protection on
                            construction commenced                                   approximately 900 properties

          4                 Major flood relief schemes Construction                  Standard level of flood protection to
                            progressed                                               approximately 2,600 properties
                                                                                     (when completed)

                            Schemes which progressed through
          24
                            design and development

          435               Completed Minor Flood Scheme through                     6,153 estimated properties protected
                            funding to Local Authorities

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In addition to schemes undertaken directly by the OPW, just under €3million was provided to Local Authorities
for flood risk management of 83 localised flood relief projects within their domains in 2016, bringing the
cumulative number and funding of schemes approved to 597, providing protection to an estimated 6,153
properties.

Reprioritisation 2017 to 2022
In order to facilitate the continued implementation of the 2015 Capital plan, the OPW has implemented a number
of key delivery elements and will reprioritise the following:

     Drainage Schemes -The OPW has a statutory obligation to maintain drainage schemes completed under
         the 1945 Arterial Drainage Act. A number of these schemes include significant lengths of flood defence
         embankments, approximately 800km nationally, which were initially constructed in the 1950s/1960s to
         provide benefit for agricultural purposes. The defence embankments no longer just protect agricultural
         land and many properties are now located within the risk protection areas of these embankment
         structures.
         A number of these embankments are currently considered not to be of a standard that is sufficient to deal
         with the impact of climate change particularly given the changed nature of the land use within the areas
         they defend. The OPW consider that it is imperative that action be taken to address this matter and
         propose to commence a programme of works which were not within the scope of the CFRAM. The
         objective of this work is to support the safety of people and properties and further improve these flood
         defence assets. Investment under this proposal will be prioritised through a risk-based approach, based
         on risk to life, extent of people / properties affected, economic risk, and environmental implications.
         The OPW will reprioritise capital investment of €0.4 m in 2018 and €2m per annum from 2019 to 2022,
         in total the sum of €8.4m.

     The OPW has found that construction of particular flood relief schemes by their own direct labour force
         is a very efficient and effective measure, ultimately supporting value for money. This practice often
         accelerates delivery and mitigates the risk of additional contractual claims, as it provides the flexibility
         required to progress different phases of schemes, in particular where unforeseen environmental issues
         are encountered. In order to undertake a number of flood relief schemes through a direct labour force, it
         will be necessary to acquire additional plant and machinery. In this regard, it is intended to apportion
         €1m of the capital allocation to accelerated investment in plant and machinery from 2018 onwards.

    

     An allocation of €0.864m is ring-fenced within the 2017 allocation to allow for the initial set up costs of
         a Flood Forecasting Warning Service, to be initiated by Met Éireann. Future operating costs will be borne
         directly by Met Éireann and the OPW.

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Future Additional Funding Requirements 2018 to 2022
 In total the additional sum of €50m is required under projects as outlined below for the period
                                           2018 to 2022

Flood Defence Schemes
On the proviso that the OPW retains the funding already committed of €430m, there is no additional capital
requirement on flood defence schemes over the lifetime of the 2015 Capital plan. However, €102m will be
required in 2022 for the continuation of work on these schemes.

As identified during the 2015 capital review, the scope of the work to be undertaken under the capital program is
in addition to the existing activities of the Office, and as such additional resources are necessary to ensure the
Office can complete these works. The fact that this requirement has not fully been provided for has already
constrained the efficient delivery of some aspects of the flood defence schemes. The overall impact of the existing
level of service delivery and the extra demands on resources for the delivery of this proposed investment is being
actively considered under the terms of the latest workforce plan. This plan will be provided to DPER shortly and
will detail additional staffing requirements needed by the Office to have the capacity to invest this capital
allocation in a timely and effective manner.

Voluntary Home Relocation Scheme & Individual Property Protection Measures

The Interdepartmental Flood Policy Co-ordination Group is responsible for considering;
    •    the extent of non-structural solutions that will inform the ten-year implementation strategy of the Flood
         Risk Management plans; and
    •    policies that can benefit communities and individuals directly, including those outside the areas of
         significant risk covered by the plans.
Outlined below are two proposals, which support individuals and communities through the management of flood
risk where structural defences are not the solution.

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A Programme for a Partnership Government – Flood Risk Management

Flooding has devastating impacts on individuals, business, communities and properties and requires a cross-
sectoral approach to effectively manage risk. Flood Risk Management is therefore an important commitment
within A Programme for a Partnership Government under Climate Change and Flooding. In the assessment of
flood risk, the OPW considers the potential impacts of climate change to ensure that appropriate plans to mitigate
risk are considered. The OPW, through an investment commitment of €430m provided by Government, is the
lead agency in the provision of ongoing assistance and expertise in the attainment of this priority. Table 6
describes areas of work that the OPW are actively progressing in this regard.

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Table 6 Government Priorities and OPW Actions (FRM)
                                                                                                  National Flood Plan

                                                                                               Shannon Catchment Flood
                                                                                                 Risk Implemntation &
                                                                                                  Coordination Group

                                                                                               National Flood Forecasting
                                                                                                   with Met Eireann
        Flood Risk Management                  Climate Change & Flooding
                                                                                               Home Protection Measures
                                                                                                 Community Resilience
                                                                                                    Development
                                                                                                    Flood Insurance
                                                                                                   Memorandum of
                                                                                                    Understanding

The OPW’s Catchment Flood Risk Assessment and Management (CFRAM) Programme is the principal vehicle
for supporting Government priority of implementing compliance with national policy on flood risk management
and EU Floods Directives. National flood plans have been developed to be implemented over a ten-year period
with the objective to proactively manage flood risk in those areas at significant risk from fluvial and coastal
flooding. Other measures running in tandem with this approach are set out above in Table 6.

The OPW chairs the Interdepartmental Flood Policy Co-ordination Group which is actively considering further
policy issues to supplement the existing implementation plan for all at risk properties and facilitate the delivery
of flooding policy priorities set out in A Programme for a Partnership Government including
    •      implementation aspects of future relocation of homes and/or farm building where that proves
           unavoidable in the context of the schemes to be devised for each of the affected areas under the CFRAM
           programme
    •      provision of guidance to riparian owners on how they can meet their legal obligations in relation to flood
           risk management
    •      provision of guidance on land use management such as forestry that may impact and/or benefit long-term
           flood risk management.

Climate change has a direct impact on flood risk management and as such is a key challenge facing the planning
and implementation of the ongoing flood programmes. It is widely recognised that the two primary responses to
climate change, are mitigation and adaptation. OPW flood schemes support the Government policy on climate
change mitigation and adaptation, by
    •      implementing a holistic approach to flood risk management;
    •      deterring inappropriate developments on floodplains;
    •      ensuring that drainage systems function adequately in times of severe rainfall and
    •      ensuring adequate sea defence.

Proposals outlined in this submission will consider the known additional risks that climate change is making to
the environment in the flood risk management area and will support the increased emphasis to be placed on non-
structural measures for flood management.

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A Programme for a Partnership Government recognises that in some cases the best flood management option can
include individual protection measures such as floodgates. Furthermore, Government acknowledged that some
properties may not be capable of being protected from flooding on an economic basis. Therefore, a commitment
to provide a voluntary property relocation scheme for properties, including businesses, affected by repeat flooding
is currently under consideration by Government. The OPW have evaluated how this priority can be implemented,
which is detailed above.

The undertaking of works under the €430m capital investment earmarked for flooding, contribute to other
commitments within A Programme for a Partnership Government, including jobs and rural development. The
investment will bring employment opportunities nationwide through the implementation of this capital
programme.

Economic and Socio-Economic Return

The effects of flooding are wide ranging, impacting on the economy, social wellbeing and the environment. For
individuals and communities, the impact can be significant in terms of personal suffering and financial loss; and
even where flooding has natural causes, it can have damaging effects on the environment. Essential services
such as mains water, electricity and transport can be disrupted. Property and possessions can be damaged and
most seriously, flooding can result in injury and death. The fear of living in a high risk property has devastating
effects of social wellbeing of people and communities.

Investment in flood risk management will provide a return under a number of headings including;

Economic

     •   Reduced future flood costs as a consequence of mitigating and flood prevention resulting in a reduction
         in the number of properties and businesses damaged from flooding.
     •   Supporting employment in the construction and services industries from the design, build and
         maintenance of schemes.
     •   Assisting the agriculture and fishing industry.

Environmental

    •    Protection of nature by avoiding damage to, and where possible enhancing, the flora and fauna.
    •    Improvement of water quality and restoration of water resources.
    •    Protection and where possible enhancement of the countries fisheries resource.
    •    Protection and where possible enhance, landscape character and visual amenities within the zone of
         influence.

Social

    •    Avoid damage and reduce risk of flooding to, or loss of, features of cultural heritage importance and their
         setting.
    •    Support social wellbeing of people and communities.

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Supporting Sectoral Goals

Flood risk management supports sectoral goals through a number of current activities with other organisations
including

    •   Rural land drainage and flood protection, provided through the maintenance of Arterial Drainage
        Schemes, Drainage Districts and Land Commission Embankments.
    •   Flood Protection, provided through Flood Relief Schemes and Minor Works, and the design and
        maintenance of urban storm water and other infrastructure.
    •   Flood prevention, by way of sustainable planning and development.
    •   Flood preparedness, response and resilience, provided through public information campaigns, flood
        forecasting and warning, effective flood emergency response planning and building individual and
        community resilience.
    •   Risk assessment and management planning, including the collection of hydrological and flood data, and
        the National PFRA and CFRAM Programmes.
    •   Development of a strategic maintenance plan for the River Shannon by the Shannon Flood Risk State
        Agency Co-ordination Working Group.

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                                       Estate Management

   Vision: To maximise the efficient use and value of the State property portfolio, including Built Heritage.

Goals: To deliver on the management, maintenance, design and sourcing of the State Property Portfolio, and
the Heritage Portfolio; and the provision of design excellence, construction, and advisory and support services
                           to the highest standard for Government and State clients

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Introduction
Efficient modern property and accommodation is a key requirement for the successful delivery of a number of
priorities within A Programme for a Partnership Government. Estate Management by the OPW is an all-
encompassing approach of strategically aligning the use of State property with these Government priorities while
ensuring value for money through the optimal use of resources.

The effective use of State property requires a planned holistic approach to the portfolio including a variety of
actions and interventions as described in Table 7.

Table 7 Estate Management within the OPW

The above activities, including the provision and refurbishment of modern energy efficient accommodation are
major factors in ongoing efforts to achieve greater economies in terms of space and efficiency within the public
sector. Appropriate accommodation is a key enabler to fulfilling the functional capacity of Government
Departments. It is a constant challenge for the OPW to deliver these services within the economic boundaries of
the sums currently allocated for capital investment and the restrictions on the short time span to which this funding
relates.

In terms of the acquisition and disposal of property the OPW carries out the function within the governance
principles as laid down in Circular 17/2016 “Policy for Property Acquisition and for Disposal of Surplus Property”
which outline best practice for all Government property holders.

For the purpose of this submission we have described the capital requirements of Estate Management under two
relatively distinct categories, that of

     •     Property Development, and
     •     Built Heritage

Whilst the above areas are separate, it is important to acknowledge that the functions and activities within the two
areas outlined above overlap to a large extent, in particular in the use of workforce and accommodation resources,
which ensures operations within these areas are carried out in an optimal manner and synergies are realised.

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Progress Report to end 2016
In the use of public funds, the OPW strives to provide high quality outcomes and to optimise value for money.
During the first year of the 2015 Capital Plan, €83m has been invested in capital programmes within EM. Outputs
from this investment include asset acquisitions, refurbishments, new builds, unitary payments and supporting
infrastructure.

Table 8 Capital Investment in EM 2016

                                                                                        New Works / Builds

                                                                                       Unitary Payments

                                                                                       Acquisition of Sites and Buildings
                                 €25m
                                                                                       ICT Support Services
                                                              €55.2m
                                                                                       Grants for Refurbishment

                                                                                       Other

Investment in EM in the first year of the current capital plan is set out above in Table 8. Under this plan 65% of
the funding has been spent on new builds and works, with 30% expended on the continuation of unitary payments
on the Convention Centre, Dublin (See Appendix 2). Through cost effectiveness in the use of public funds, the
OPW have also been in a position to acquire a number of strategic sites including one on Merrion Square and to
further support the Glasnevin Cemetery Trust through a capital grant.

Table 9 Investment in New Works 2016

                                     1% 2%                                                     Refurbishment/Fit out

                                     7%                                                        Mechanical Electrical
                             10%
                                                          47%                                  Garda Programme
                       12%
                                                                                               Heritage
                               21%
                                                                                               Other

                                                                                               New Acquisitions

                                                                                               Leinster House

The major area for investment during 2016 has been under the New Works Subhead and consists of a number of
annual programmes of work for other Government Departments including An Garda Síochána, Social Protection
and Arts Heritage Regional Rural and Gaeltacht Affairs. Within this Subhead 21% of funding was allocated to
the Mechanical and Electrical programme, and was used to undertake essential works across all Departments
including a Lift Replacement Programme, the Energy Efficiency programme and the Boiler Replacement
programme. This programme of preventative work, which is not captured within the property maintenance budget,

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is often not visible in terms of capital investment yet has facilitated the efficient running of Government
Department accommodation in Dublin and the provinces.

While an overall reduction in the availability of funding has meant that the number of major build projects has
diminished in recent years, the OPW continues to optimise available resources. In 2016, this led to the opening of
a new passport office in Knockmaun House, the new visitor centre in Kilmainham courthouse and the completion
of a major improvement project at the National Gallery.

Reprioritisation 2017 to 2022
At this stage, the OPW is not pursuing any major reprioritisation within its EM programme. This is in the context
that in terms of managing the existing allocation for EM priorities for Government Departments, priorities
invariably exceed the actual allocation and a constant reprioritisation of project delivery is necessary. Contractual
commitments and demand led priority projects on the New Works Subhead at various stages of implementation
amount to a funding requirement of €85m in 2017 versus an allocation of €53.5m (see Appendix 3).

Significant investment is profiled for Leinster House in the coming year and the Exploration Station (Children’s
Museum project) will be prioritised for funding. Such projects in planning or already committed exceed the 2017
allocation by €32m (60%) and will further diminish the capacity to invest in major projects given the current level
of resources.

Future Additional Funding Requirements 2018 to 2022
As outlined above, the current funding provision within the New Works area of EM for 2017/2018 is over-
committed. In addition to this, the OPW has evaluated a number of proposed projects outlined below, as those
which are critical to Government priorities and deliver maximum value to the State in the use of public monies.

 In total the additional sum of €408.1 is required under projects as outlined below for the period 2018 to
                                                    2022

Structured medium to long-term financial planning is a prerequisite to the OPW being in a position to successful
deliver on capital projects. The OPW have clear evidence that the certainty provided through the medium-term
€430m capital commitment provided to FRM has enabled the Office to align deliverables to A Programme for a
Partnership Government over the lifetime of the Capital Plan. This now needs to be replicated on EM to facilitate
a medium term approach to investment in this area that overcomes the challenges presented by inadequate capital
funding and the annual estimates cycle. This will facilitate the OPW in developing medium to long-term strategies
for improving capacity, enhancing space utilisation, reducing costs and ensuring the property portfolios useful
life.

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The Office of Public Works Capital Review Plan 2018 to 2022

Additional funding requirements are outlined under the following headings:

    1.   Property Development & Retrofit

    3.   Mechanical & Electrical Works
             a.   Mechanical and Electrical Replacement Programme
             b.   Air Conditioning Replacement Programme of Works
    4.   Garda Investment Programme (OPW funded)
    5.   Built Heritage programme

Property Development & Retrofit

The State has a substantial portfolio of property which needs to be managed to ensure optimal usage and value
for money. The OPW has carried out in-depth evaluation or preliminary analysis, depending on the size, level of
risk and sensitivity of the project and required resources on a number of potential projects. In addition,
consideration has been given to whether to retain or sell some owned properties depending on income received or
savings to be made. Additional investment is now sought under a number of proposals which are crucial to
protecting and modernising this key State asset. While the initial investment appears significant, these proposals
are based on generating a return which provides value for money for the taxpayer and recoups the initial
investment within a medium term timeframe, generally within 5 to 10 years. In addition, the most pressing
proposals provide a solution to the provision of a meaningful decant space to provide flexibility in terms of
relocating staff during works and surrendering leases in a timely manner. This is key to the successful delivery
of the EM programme.

The proposals include the construction of new energy efficient building, the refurbishment of existing buildings
to bring them in line with current health and safety and environmental standards and the alteration, fit-out and
improvement to existing accommodation for central Government Departments. The profile of the proposals
included in this investment plan to 2022 is consistent with Government development targets and allows for an
increased level of investment in a number of areas within EM based on strong returns on investment and possible
alternative methods of proposed funding.

As part of the OPW’s lead role in the reform of the public service property portfolio the OPW published the
Property Asset Management Deliver Plan in 2014 and has delivered cumulative savings in excess of €130m in
lease surrenders since 2009 by shedding 113,000 sq.m. of office space.                       The opportunities for further
rationalisation and reform in the leased portfolio are much reduced, particularly in the context of increasing
demand, and therefore the focus within the submission turns to investing in the owned portfolio to optimise its
use in terms of better design, revised space standards and maximum efficiency but to also avoid a return to
expensive leased space for Government Departments in a rising commercial market.

Market conditions are an important factor in considering these proposals, with rents in Dublin increasing to levels
of €60-€65 p.s.f. for good quality, city centre space. Further pressure could be put on this market due to Brexit,
if firms based in the UK relocate to Dublin. Growth in Government activity tends to run in parallel with economic

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The Office of Public Works Capital Review Plan 2018 to 2022

growth and as such, an increase in staff numbers across Departments is expected. The current OPW portfolio
simply does not have the capacity to accommodate this expected increase in demand and if investment is
not committed to the owned portfolio additional leased space will be required.

A significant number of critical leased properties in central Dublin are due for renewal or surrender in the coming
years. This presents a vital opportunity to achieve further efficiencies in the direct provision of Office
accommodation and mitigate the States exposure to high rents and long-term leases. This finding is based on the
substantial benefits to be achieved by investing in the renovation and modernisation of some of the properties,
which should alleviate difficulties and significant expense encountered by

    •    reducing the requirement to enter long-term lease commitments
    •    providing alternative accommodation outside the current private property sector, which should assist in
         taking pressure off such markets within the urban areas
    •    reducing the requirement to pay increasing market rental rates
    •    mitigating the risk of non-renewal of leases by some landlords and the consequential expenditure and
         disruption impact associated with relocation of Departments
    •    facilitating the need to meet energy efficiency regulations and obligations.

Outlined below are key investment areas in Estate Management, which can support the needs of OPW clients by
utilising the most appropriate mix of owned and leased properties and providing the necessary flexibility in the
portfolio thereby maximising the use of the owned estate.

KEY FACTS & FIGURES

          Priority            Build Type                       Cost                   Savings    Payback Period
                                                               €m                     €m p.a.*       (years)

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The Office of Public Works Capital Review Plan 2018 to 2022

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The Office of Public Works Capital Review Plan 2018 to 2022

Ongoing Retrofits

A programme of deep retrofits would involve a complete fabric upgrade of selected buildings, as well as
improvements to light and heating systems in order to ensure compliance with building regulations and add value
to the achievement of high levels of energy savings.

2   Based on the current occupancy which includes waiting rooms which will not be replicated.
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The Office of Public Works Capital Review Plan 2018 to 2022

Scoping and planning exercises have been carried out on the works proposed under this priority and are at
commencement stage, conditional to receipt of the requested capital investment.

This programme of works is part of the OPW efforts in achieving energy usage targets, both EU and National, for
our buildings. In this regard the OPW has achieved significant savings from our current resources but this
additional funding is essential.

Portfolio Mix

It is important to note that of the owned property in Dublin there are fifty Georgian/heritage properties with a
further significant number classified as 1st/2nd generation office space3. Table 9 provide a summary analysis of
office accommodation pre and post the five proposals as outlined under property development and retrofit. If the
main priority projects in the owned portfolio were completed, then the profile of the owned portfolio in Dublin
would change significantly as illustrated below:

Table 10 Current Portfolio mix vs Projected mix

                                         Georgian        1st/2nd Generation       3rd Generation
                                   52%
                       41.00%

                                                                                    41%

                                                                                                 38%

                                                                                                             21%
                                                 7.00%

                       CURRENT PORTFOLIO                                           PROJECTED PORTFOLIO

The above proposals are critical to managing the leased property portfolio of the OPW, in order to mitigate against
the risk of high rents and to avail of the opportunity to reduce costs through the development of owned property.
Table 11 provides a summary of the total approximate area (sqm) of leased office accommodation in Dublin where
leases will expire during the period 2017 to 2022. All of the above office accommodation proposals meet the
criteria of circular 17/2016 of being located within walking distance of local amenities and close to public
transport.

Table 11 Square Meter of Lease Space Expires 2017 to 2022

                                                                                               2017
                                              10,708      11,935                               2018
                                                                                               2019
                                             13,519                 3,765                      2020
                                                          6,703                                2021
                                                                                               2022
                                                               2,789

3
    Georgian: Offices in properties constructed between 1714 - 1837 originally built and occupied as residential
     Properties. A significant percentage are "protected structures"
    3rd Generation: Modern Building, post 1990 with raised access floor consisting of wide-open space with support columns
    2nd Generation: Older building pre 1990, with floor trunking which has been previously occupied.
    1st Generation: First purpose built office accommodation.
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The Office of Public Works Capital Review Plan 2018 to 2022

Mechanical & Electrical (M&E)

The OPW requires additional investment for two programmes within its M&E division that of mechanical and
electrical upgrade works and air conditioning replacement. Details are provided below on these proposals, but it
should be borne in mind that while we acknowledge the cost of these programmes, there is a far greater cost in
not meeting national and EU regulations and as such this additional investment is unavoidable.

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The Office of Public Works Capital Review Plan 2018 to 2022

Electrical and Mechanical Upgrade Works Programme

The Electrical and Mechanical Upgrade Works is a program to support compliance with the 2007 Safety Health
and Welfare at Work regulations by highlighting and addressing electrical system defects in need of significant
repair and replacement.

In many cases this work will have a beneficial effect on the energy demand in the buildings.

    KEY FACTS & FIGURES

            Properties to be completed (m2 )                                                200,000m2

            Capital Requirement

1

R22 Air Conditioning Replacement Programme of Works

R22 refrigerant gas is now prohibited under the Montreal agreement due to its harmful effect to the ozone layer.
The OPW have identified 11 key projects within the State’s property portfolio where alternative measures must
now be undertaken. The benefits of these projects are wide ranging and include the:

      •    improvement of the health and safety for occupants of these buildings
      •    protection of the buildings as an important asset of the State
      •    reduction in exposure to H&S legislative fines and penalties
      •    mitigation against compensation claims.

KEY FACTS & FIGURES

            Number of                Number of Targeted                             Cost
            Buildings                Buildings                                      €m

            126                                 11

The above two M&E works will maintain and improve our assets in a fit-for-purpose state through enhanced
health and safety rating of the buildings, reduction of the energy consumption and support improvement of the
environment.

The investment will enable the Government to adhere to the commitments of the Montreal Protocol on substances
which deplete the ozone layer and support Ireland in meeting its commitment to transition to a low carbon society
by 2050. It will include the removal of 2.2 tonnes of R22 gas from the environment and the replacement of these
with energy efficient air-condition systems which will reduce electricity usage and contribute to carbon reduction
targets.

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The Office of Public Works Capital Review Plan 2018 to 2022

Garda Investment Programme

The Department of Justice and Equality are responsible for funding of An Garda Síochána (AGS) “Modernisation
and Renewal Programme 2016-2021”. The OPW have committed to further supporting the plan by allocating
         from within its New Works allocation under the Capital Plan 2015 for works to be undertaken on Garda
Stations. A dedicated implementation team comprising personnel from the OPW, Department of Justice and
Equality and An Garda Síochána was formed with projects to be delivered under four distinct Work programmes,
as outlined below:

              Programme A                Programme B                     Programme C                  Programme D
              OPW Funded            An Garda Síochána                    OPW Funded                     PPP Bundle
                                        (AGS) Funded
         National cell refurbishment Custody facilities                   Consists of eight      PEMS stores (5 locations)
         programme                                                       substantial projects
                                           Refurbishments                                        New Garda Station bundle
         Remedial works PEMS- (at                                                                (Clonmel, Macroom, &
         existing premises)                                                                      Sligo)

         Compliance/ upgrade works

As can be observed from the table above, some programmes are to be funded through allocations from the AGS
and through Department of Justice and Equality via Public Private Partnerships. In regard to programme A and C
which are to be funded by the OPW, work has been progressing on each of these programmes. However, the OPW
estimates that a capital investment requirement of                 will be required to complete the full scope of these
projects, indicating an additional capital requirement of              during the lifetime of this capital plan.

Other priorities that have been prioritised in A Programme for a Partnership Government may appear on the
Department of Justice and Equality submission yet may require delivery by the OPW include;

     •     accommodation and training facilities for increased Garda numbers e.g. Templemore
     •     Phoenix Park – Upgrade of Garda Headquarters
     •     Fitzgibbon Street – re-opening of Garda station
     •     Courts complex at Chancery Lane

It is envisaged that significant funding will be required to undertake the strategic investments outlined above.
While capital sums for these projects will be sought by the Department of Justice and Equality, the OPW will
need to be adequately resourced to meet the additional workforce or contractor costs of implementing these
priorities.

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The Office of Public Works Capital Review Plan 2018 to 2022

Built Heritage Estate

The importance of the State’s National Heritage cannot be underestimated either in a cultural or economic sense.
The OPW is responsible for the conservation, maintenance and upkeep of some 764 national monuments in State
care and guided visitor services are provided at up to 70 OPW managed heritage sites. Responsibilities include
the day to day management and presentation of 30 major Historic Properties, Gardens and Arboreta.

Progress Report on Built Heritage Estate to end 2016
Investment in capital works on Heritage properties is funded through the Department of Arts, Heritage Regional,
Rural and Gaeltacht Affairs (DAHRRGA).             Due to a scale back in available capital funding this has been
insufficient to conserve and protect the portfolio and capital funding is now required to meet statutory obligations
and fulfil the potential of the Estate. In recent years most of the urgent works in the preservation and conservation
of historic properties and the upkeep and presentation of national monuments has been prioritised for investment
from within the New Works Subhead allocation, on the OPW Vote.

Table 12 Capital Investment in Heritage Services 2011 to 2016

         8
         6
   €m 4
         2
         0
                   2011            2012              2013               2014              2015       2016
                                                              Year

                                                  OPW        DAHRRGA

Capital investment in the heritage estate in recent years has focussed on three particular areas:

    •    Emergency remedial works required at National Monument sites to address urgent Health & Safety risks
         arising through defective or ageing systems
    •    Small scale improvement works at a number of non-National Monument heritage properties designed to
         improve facilities to visitors and develop or improve infrastructure
    •    Commemorations 2016

Reprioritisation

The gap in essential works carried out on heritage properties and the capital allocation received has resulted in the
OPW allocating funds as above - €37m over the last six years versus €2m provided by DAHRRGA. The
investment imbalance clearly demonstrates that the OPW has in the past several years, been forced to fund
pressing project needs from within its own resources, in the process diminishing the funding available for other
programmes in the modern estate such as Garda, Revenue, Social Protection etc.

Policy responsibility for Heritage Services is vested in the Minister for Arts, Heritage, Regional, Rural and the
Gaeltacht Affairs yet the OPW is of the view that the heritage estate should be managed on an integrated basis, to
centralise funding for all aspects of maintenance, operation and capital development in a dedicated fund within
the OPW Vote. This will allow for the deployment of a planned and prioritised response to both the investment
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The Office of Public Works Capital Review Plan 2018 to 2022

needs of the estate and the Health and Safety concerns arising. The OPW cannot sustain this lack of funding and
there is a substantial pent up demand which has not been addressed and needs to be provided for in a structured
manner within the revised plan’s timeframe.

In order to address this need, two main programmes of work which require additional capital funding over the
years 2018 to 2022 are outlined below.

Future Additional Funding Requirements 2018 to 2022
In total the additional sum of €53.8m is required under projects as outlined below for the period
                                           2018 to 2022

The proposals for additional funding for investment in built heritage are twofold. One is the critical investment
in the protection and conservation of the infrastructure supports at Heritage sites nationwide and is necessary to
address the “non-tourist” related shortfall in essential facilities. The second is the OPW contribution towards
visitor facing investment provided by Fáilte based on a €52m programme of investment to 2021.

KEY FACTS & FIGURES

             Total Number of Historic Properties in State care                               764

             Infrastructure Investment Requirement – Appendix 5                              €41m

             Tourism Investment Programme – Appendix 6                                       €12.8m1

1This
        relates to the OPW contribution to a €52m Fáilte investment programme for 2018-2021

Infrastructure Investment Programme
The Fáilte investment programme will focus on the visitor-facing elements of the Heritage estate enhancing the
overall visitor experience. Fáilte Ireland will not be providing funding for the conservation or protection of the
estates infrastructure yet the impact of this investment will be an increase in visitor numbers and ultimately an
increased capacity demand at these sites which in some locations are already under significant pressure to cater
for visitor numbers.

As referred to above, over the last number of years funding received by the OPW was for the maintenance and
ongoing operation of the Heritage estate. Capital investment has not been available to address the multiple fabric
and infrastructure issues that need urgent attention. A schedule of investment requirements to replace or replenish
basic infrastructure is provided at Appendix 5.

Tourism Investment Programme

This programme is jointly managed by the OPW, Fáilte Ireland and DAHRRGA in order to develop visitor-facing
infrastructure at heritage sites in State care and to improve certain facilities where they already exist. The

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