Inquiry call over former bankers’ rental deal

THE Government is facing calls for an investigation into a €25 million agreement with two former Anglo and AIB bankers for the renting of civil service offices.

Despite massive drops in rent values, the Government signed up to a 24% rent increase earlier this year for buildings in Galway.

The beneficiaries of the deal are former AIB manager John Hughes and former Anglo director John Browne, trading under the name Ballybrit Partnership.

The rent contract for one of the Galway offices has been described as the highest paid outside of Dublin by a state body – and has been compared to prices being paid in the capital’s O’Connell Street.

The pair of ex-bankers are being paid over €2m a year in rent including €922,250 for Department of Agriculture offices and €1.2m for office space for the Revenue Commissioners.

The lease will last until 2023.

Fine Gael TD Ulick Burke plans to raise the issue in the Dáil this week, calling for an investigation into the property dealing and seeking answers on whether the deals were subject to open competition.

In April, the Revenue Commissioners moved into the Fairgreen Building from just around the corner in Eyre Square.

The two bankers are paid an annual rent of €922,250 by the Department of Agriculture offices in the Dockgate Building which is around 100 meters away from the old offices in the Hynes Building.

This is compared to the €744,825 to lease for the office before an increase was awarded at the start of this year, backdated to January 2008. It will last up until 2023.

On top of the rent, the department, which employs 52 staff in its Galway offices, is paying €53,646 a year for the use of 65 car parking spaces and around €74,000 in service charges.

Minister for Agriculture Brendan Smith claimed in the Dáil last week his department had “been to the fore” in reducing public service costs.

However, Galway-based Mr Burke said: “They are paying O’Connell Street prices in Galway– that is unbelievable.”

In response to a Parliamentary Question on the issue, the Minister responsible for the Office of Public Works Martin Mansergh said the OPW had argued that the rent should not be increased, but an independent arbitrator ruled against the OPW.

“An independent arbitrator was appointed to determine the rent payable for office accommodation at Dockgate,” he said.

“The OPW maintained in their submissions to the arbitrator that no rent increase was justified while the landlord maintained his position that an increase was merited,” he said.

“The Arbitrator’s determination, which is legally binding on the concerned parties as provided for under the lease, provided for an annual increase of the order of 24% in the monies payable.”