State purchase of prison site for €29.9m was ‘too much’

SEVERAL questions were raised about why the Government paid over twice the market value for the site of a new prison in north Dublin last year.

The Comptroller and Auditor General, John Purcell claimed the site at Thornton Hall could have been bought “at a much lower price” than the €29.9m purchase price paid by the State.

The C&AG’s report explained the high purchase price was largely attributable to the decision to disclose the Government’s interest in acquiring a site for a prison, rather than to try and buy such a property through a confidential third party. As a result, the State was forced to pay a high premium.

Mr Purcell suggested the case highlighted the need for greater consistency in the way the Government set about acquiring land for major public projects.

But senior officials at the Department of Justice yesterday maintained it was their view that using an anonymous purchase would not have been “appropriate or practical in the purchase of a site for the most significant prison development in the history of the State.”

A Justice spokesperson said the department’s secretary general, Seán Aylward was satisfied it could not have obtained a site as suitable as Thornton Hall for a lower price.

The price paid by the Prison Service for the Thornton Hall land was almost €200,000 per acre — at least twice the market price for similar agriculture land with development potential in north Dublin.

Mr Purcell said there were several apparent inconsistencies in the way in which the department evaluated a number of potential locations for the prison.

“The procurement arrangements and, in particular, the use of public advertisement did not position the State to acquire the land at the lowest cost economically achievable,” said Mr Purcell.

The State bought the 150-acre site in January 2005 in order to build a replacement for Mountjoy.

The C&AG noted the size of the property purchased by the State was 50% more than the estimated area required even though it also allowed for space for a facility to replace the existing Central Mental Hospital in Dundrum.

The Department of Justice said it did not try and set a budget because of a large number of variables involved in deciding on the location of the new prison.

An examination of the way in which department officials set about acquiring the site showed cost was eliminated as a factor in evaluating several different locations.

Mr Purcell said better value for money could have been obtained if the Department of Justice and the Prison Service had not limited themselves to an evaluation of just the top three ranking sites.

The C&AG also discovered there are no official records of the State’s negotiation strategy or any spending limit in relation to the purchase of Thornton Hall.

Department of Justice officials said the Prison Service had decided to publicly disclose that it was looking for a site for a new prison for a number of reasons, including openness and transparency as well as to maximise the number of potential locations.

However, the Department of Justice admitted it did not seek any professional advice on the potential cost impact of declaring its interest in acquiring a large site for a prison.

The C&AG also discovered the Office of Public Works had hired property consultants, CB Richard Ellis to assist with a site search without tendering for the service or drawing up any formal contract.

Mr Purcell said the manner in which CB Richard Ellis had been engaged by the OPW was in breach of the rules for the procurement of professional services in several different aspects.

Although it was envisaged CB Richard Ellis would only carry out an assessment of only three potential sites at a cost of €184,500, it emerged they were paid a total of €256,506 plus VAT after ten sites were inspected.