Docklands chief admits €412m deal ‘flawed’

The acting chief of the Dublin Docklands Authority acknowledged a “flawed process” was used to buy the Irish Glass Bottle site for €412m — the most expensive property purchase ever by the State — amid claims a “golden circle” sealed the deal.

Angry TDs yesterday argued a “maze of conflicts of interest” surrounded the purchase of the Ringsend site, which has landed the Dublin Docklands Development Authority with a €52m bill.

Former authority board members will now face questioning before an Oireachtas committee.

Authority acting CEO Loretta Lambkin admitted the former DDDA board, which she had been on, failed in its duties overseeing the purchase, which had been led by developer Bernard McNamara — a partner in the project.

She said a “flawed process” was used to buy the site. “It is clear that a number of decisions taken by the authority, particularly in relation to the purchase of the Irish Glass Bottle site were, in retrospect, wrong and have exposed the authority to considerable costs.”

Appearing before the Oireachtas Public Accounts Committee, she was quizzed by TDs about the site.

The Comptroller and Auditor General yesterday outlined the unhealthy financial position of the docklands authority, mainly due to the site’s purchase.

The authority, along with joint venture company Becbay Ltd, paid €412m for the 25-acre site in early 2007 after being warned that the property market was “overheated”.

The DDDA, a state body with a commercial mandate, received no independent advice about the deal.

Furthermore, two of its board members were senior members in Anglo Irish Bank at the time, which became a key lender for the deal. Anglo’s former CEO Seán FitzPatrick and director Lar Bradshaw were both DDDA board members.

The C&AG yesterday added: “A key concern was in the area of management of conflicts of interest.”

It has also emerged that incorrect information was sent to the Department of Environment — the body overseeing the authority — about permission to breach a €127m cap to buy the site.

While the authority in late 2006 had, in a letter to the department, estimated it may cost €220m, the same board had discussed the possibility of paying nearly double this just nine days earlier.

Yesterday, TDs voiced anger at the lack of information provided to PAC over board meetings that occurred ahead of the Jan 2007 purchase.

Fine Gael’s Kieran O’Donnell said a “maze of conflicts of interest” surrounded the deal. Others alleged a “golden circle” had been involved. Labour’s Gerard Nash said principles had been abandoned during the deal and the authority had “thrown caution to the wind”.

PAC chairman John McGuinness wants to call in former DDDA members and officials with the banks and the departments who approved the deal.