Future bleak for DDDA as it still pays price for Glass Bottle fiasco
THE Dublin Docklands Development Authority is still paying the price of its disastrous decision to participate in the purchase of the former Irish Glass Bottle site five years ago. It is transferring nine docklands sites to NAMA in return for being released from loan guarantees it gave at the time of the original deal.
The DDDA is a 26pc shareholder in Becbay, the company that paid an astronomical €412m for the Ringsend site.
The vast bulk of this money was borrowed, with Anglo and AIB lending the consortium €288m. The site was recently valued at just €50m and the Becbay loans have been transferred to NAMA.
While most of the Becbay loans are non-recourse, it is understood that the shareholders, including the DDDA, provided guarantees for €112m of its borrowings.
In addition to providing guarantees, the DDDA injected €43m of equity into Becbay, which was used to carry out remedial work on the contaminated site.
The deal with NAMA releases the DDDA from the guarantees. However, NAMA has extracted a very heavy price, with the DDDA transferring nine sites in return.
These include the site of the proposed U2 Tower at the corner of Sir John Rogerson's Quay and Britain Quay; the former Readymix site at East Wall; the former Jones Oil site on Sheriff Street and half a dozen other plots on both sides of the river.
Stripped of most of its remaining assets, what does the future now hold for the DDDA, which began life as the Custom House Dock Development Authority in 1987 with the mission to develop what is now the IFSC and whose brief was widened to include all of Dublin's docklands a decade later?
The future looks bleak, with losses of almost €160m over the past three years. The DDDA's net assets have shrunk from €177m at the end of 2007 to just over €2m at the end of 2010.
The DDDA argues that it still has a role as a fast-track planning authority, but this is somewhat undermined by the fact that it is currently considering no new applications for planning permission.
With NAMA having picked the DDDA, clean serious questions now need to be asked about its future viability.