Former Dublin Docklands Development Authority (DDDA) board members, Seanie Fitzpatrick, Lar Bradshaw and Paul Moloney will be called before the Oireachtas Public Accounts Committee (PAC) to explain their role in the controversial €412m Irish Glass Bottle (IGB) site debacle.
Department of the Environment official Mary Moylan sat on the board of the DDDA to represent the public interest. She appeared before the PAC yesterday to unveil the chain of events that led to the DDDA — a State body — entering into a 26% joint venture (JV) with the now-bankrupt developer Bernard McNamara in one of the biggest loss-making property deals in the history of the State.
PAC member, Fine Gael TD Paschal Donohue, said he found “incredulous” some of the testimony given by Ms Moylan.
The PAC meeting focused on three DDDA board meetings in 2006, on Oct 3, 20 and 24. The first meeting took place in San Sebastian, Spain, as all eight board members were in the city on a study trip to see the port development and conference centre. DDDA chief executive Mr Moloney told the meeting a developer was interested in forming a JV with the State body to develop the IGB site. Ms Moylan said the developer’s identity was confidential at this meeting, but she could “infer who it was”.
Mr Moloney wrote to Ms Moylan on Oct 12 to advise that the valuation of the site was €220m. At the DDDA board meeting on Oct 20, it emerged the valuation of the site was between €275m and €375m. Mr Donohue wanted to know why there was significant change in value over eight days. Ms Moylan said the change was based on plot density and a changing mix of residential/commercial development. Mr Donohue said he was not satisfied with this answer.
At the meeting of Oct 24, which took place by teleconference, board members Seanie Fitzpatrick, Lar Bradshaw and Declan McCourt declared conflicts of interest. Mr McNamara had sought funding from Anglo Irish Bank and Bank of Ireland. Mr McCourt was a board member of Bank of Ireland and the others were board members of Anglo.
However, the DDDA board received legal advice that there was no material conflict of interest, as none of the three sat on the credit committees of the banks.
Mr Donohue asked if the DDDA had spoken to any other developer about developing the site. Ms Moylan said the DDDA got legal advice it was not in breach of public procurement policy.
A price of €375m was agreed with Mr McNamara, but this rose to €412. The then minister for the environment was not informed of the price throughout the process, as there was no statutory obligation to do so, said Ms Moylan. The only consent needed from the minister was to raise the borrowings for the JV and to enter the JV.
Ms Moylan said the board got advice that the property market might have been overheating. To protect the DDDA, it insisted Mr McNamara pay the difference between €375m and €412m himself. Moreover, of its 26% stake, it put 30% (€36m) in equity and the rest in bank borrowings.
The site is now valued at €60m and is in Nama. Mr McNamara sued the DDDA over the failure to develop the site, but these proceedings were struck out.
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