Monday 5 December 2016

Civil servant criticised in €412m deal probe

Official could have forced DDDA to correct misleading site value, Dáil watchdog finds

Published 18/11/2015 | 02:30

The Irish Glass Bottle site in Ringsend
The Irish Glass Bottle site in Ringsend
Mary Moylan: civil servant who sat on board of the DDDA

A senior civil servant should have ensured ministers knew the purchase price of an iconic Celtic Tiger era site would be almost double the €220m originally anticipated, a new Dáil report finds.

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The draft report by the Dáil spending watchdog says the official could have done more to correct a misleading submission made to ministers, shortly before the Irish Glass Bottle site was purchased for €412m.

Mary Moylan, an assistant secretary at the Department of Environment, sat on the board of the Dublin Docklands Development Authority (DDDA) when it joined a consortium in 2006 for the ill-fated land deal.

However, when the anticipated price jumped considerably shortly before the Becbay consortium submitted its bid, she did not inform her minister of the development.

The draft Dáil Public Account Committee report, expected to be signed off on and published tomorrow, calls for reforms of how senior civil servants operate on the boards of State bodies.

The PAC has been investigating the property deal, one of the most disastrous of the boom era, for the past five years.

The committee pinpointed the deal as "the main reason" the DDDA's financial status declined to the extent where it is now being dissolved.

It found the DDDA ended up spending €52.1m in connection with the site, which was never developed after its value slumped during the economic crash. The DDDA's partners in Becbay included developer Bernard McNamara and businessman Derek Quinlan.

The draft report found fiduciary rules meant Ms Moylan was prevented from disclosing to her minister or department colleagues any knowledge obtained by virtue of being a board member.

However, the draft report said she could have forced the issue to ensure the Government was fully aware of what the DDDA was getting into.

"While the committee recognises the difficulty of a public official in this case, a board member should raise such concerns directly with the chairman or the CEO," it said.

"Had this happened, the authority would have been forced to correct its misleading submission and decisions taken by both ministers would have been done in the full knowledge of what the [Becbay] joint venture was going to pay for the site."

At a hearing of the PAC in 2013, Ms Moylan was asked why she had not informed then Environment Minister Dick Roche of the price increase.

In response, she said she did not inform him as his approval was not required.

"Looking back at it now, in the light of all that has happened since 2006, it would have been better had the minister been made aware of the final bid price," she said.

The draft report outlined how the DDDA sought approval from Mr Roche, with the consent of then Finance Minister Brian Cowen, to increase its borrowings up to its maximum allowable level of €127m.

This was agreed to, based on a submission valuing the site at €220m.

The draft report said the committee had heard evidence that there was no need to inform Mr Roche of the increased price. It said officials had insisted Mr Roche was only required to give consent to improve the borrowing limit and the DDDA has the capacity to service such borrowing.

However, the draft report said the PAC "does not accept this position" and both ministers should have been informed of the "broad parameters".

It recommends the fiduciary role of civil servants on the board of State bodies should not impinge on their responsibility to keep their minister informed of important issues.

The issue needs to be examined in relation to appointments of civil servants to State boards, it says.

Irish Independent

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