Knockdown price for State land

SOUTH WHARF Plc is attempting to buy 25 acres of State land for a fraction of its price under a legal loophole.

The shares in the company shot up by 70 cents or €25 million in value yesterday following news of the move. The land in question, which housed the former Irish Glass Bottle Company in Ringsend, Dublin, is said to be worth an estimated €300 million. But the company is attempting to buy it for less than €20 million.

Dublin Port Company, which owns the land on behalf of the state, said it would fight the move all the way to the Supreme Court. But South Wharf says a legal loophole justifies its move to buy the prime land.

In May, Enterprise Minister Micheál Martin rushed through legislation to prevent such deals being made at the expense of the state. This followed the purchase of land in Clonshaugh by an IDA client company.

The legislation, however, covered lands held by IDA Ireland, Údarás na Gaeltachta and Shannon Development.

Further amendments were made to block off any future exploitation of the outdated law on 28 June 2005.

However, South Wharf had moved to buy the land before the further changes were made in the legislation in June.

The group is attempting to buy the land for a multiple of 15 times its annual rent.

The 70 cents rise in the share price yesterday added €25 million to the market capital of the group which now stands at over €112 million.

Government sources say the same legal team that was involved in the IDA acquisition is also involved in the Dublin Port purchase.

Opposition politicians are up in arms over the proposal. Green Party TD Dan Boyle warned: “A legal loophole which allows tenants to buy State-owned property at knockdown prices may still exist for some State companies.” “The public land at Dublin Port was originally rented to the Irish Glass Bottle Co Ltd which is part of a consortium now called South Wharf led by Paul Coulson. South Wharf is believed to have leased the site to a connected company to make a claim on the land.

“This public land loophole is one of the Government’s biggest losses to the taxpayer in recent years. When Micheál Martin rushed through legislation in May to plug this State land purchase loophole, I asked him if any other state companies would be affected,” he said yesterday.

Kevin Humphries of the Labour Party said, whatever about the law, there was a question or “right and wrong” involved in the move to buy the land for a fraction of its true value.

South Wharf confirmed its plans in a short statement to the stock exchange yesterday.