Agency paid €1.5m for head office – twice its value

SCANDAL-HIT agency Fás paid twice as much for a new head office than a property consultant’s value, the Comptroller and Auditor General (C&AG) revealed today.

In separate deals, the C&AG found the Office of Public Works (OPW) bought six decentralisation sites for €6.9 million more than advisers had recommended.

The planned Fás headquarters in Birr, Co Offaly, ultimately cost €1.5m despite consultants warning in August 2004 that the 5.59 acre site was only worth €700,000.

The owner rejected the agency’s bottom bid and after long-winded negotiations the state training body came up with the asking price. The C&AG’s report also flagged up that four months after the initial low valuation, the consultant’s advice dramatically changed and met the on-the-market value.

Fás management have yet to move their HQ into the building.

Raising more question marks about corporate control at the agency, the C&AG revealed Fás took a 10-year lease in 2007 for one floor in a building at the Birr Technology Centre.

Some 40 staff were supposed to take up posts there but only 20 moved in.

Bosses agreed to rent the 708 square metre floor for €99,000 a year and then asked the landlord’s building firm to quote for a fit-out, for which they charged €1m.

No one else was asked to tender for the work and all-in the refit and rent cost the taxpayer €200,000 a year.

The report also looked into the OPW’s purchase of sites for decentralization and found 15 of the 22 sites were acquired at below average asking prices.

Five sites with costs higher than top benchmarked prices were purchased from private owners, it said.

A site in Mullingar was bought for €8.2m – €2.9m more than expected; Newbridge €5.5m – €1.5m more; Claremorris€2.5m – €1.2m more; Roscommon €3m – €900,000 more; Thomastown €1.8m – €300,000 more; and in Buncrana €1.1m – €100,000 more.

The C&AG also revealed consultants warned the OPW they paid over the odds for three sites. The stalled decentralisation plan should have seen 11,000 civil servants from Dublin move to 95 locations around the country.

By April this year 3,148 staff had moved.

Later, Fás management responded to the C&AG’s report on the property sales.

It said it paid the €1.5m for the site in Birr only after independent consultants revised their valuation.

Fás said: “In December 2004 the board of Fás approved the purchase of a site in Birr, Co Offaly, which was intended for its new headquarters under the decentralisation programme.

“The purchase was based on a revised evaluation from an independent professional adviser (received prior to purchase) and was within the guidelines adopted by Government for benchmarking site market values.”


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