State has rare chance to get hold of key land
'The Government has a unique opportunity to look again at planning and review polices as it becomes a key player in land development'
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THE Government may use its new role as the biggest property owner in the world to promote its economic and social policy through land re-zonings, planning permissions and provision of services like roads and communications.
The banks may also receive a higher price for loans on land and property which might be suitable for future development.
Informed sources last night said that the Government now had a unique opportunity, through NAMA, to get hold of strategically important tracts of land.
This would allow the Government to develop coherent spatial planning by matching zoning and the supply of services to its new holdings of suitable development land.
Finance Minister Brian Lenihan said that while NAMA had a commercial mandate and its function was to maximise return to the taxpayer, he was "not ruling out the possibility that useful social opportunities may emerge". But he quickly added that he was not out to "rig the system".
The draft legislation states that the Environment Minister will provide analyses on the extent to which existing zonings and planning permissions meet or exceed expected growth.
Meanwhile, the Dublin Transport Authority and the National Transport Authority will supply data on transport plans and the need to acquire land.
Debt
As well as affecting the value of the properties, future development could increase the price which NAMA eventually gets for properties it has taken over.
Last night, the Government remained hopeful that bonds NAMA will use to pay for banks' risky property loans will be kept off the national debt figure.
With the 'bad bank' widely expected to pay well over €60bn for the bank loans, the national debt could almost double from an expected €70bn at the end of this year.
However, it is understood that if NAMA, as a commercial entity, pays for the loans mainly in the form of government-backed bonds, rather than actual government bonds, it would be able to keep the debt off the State's balance sheet.
However, the Department of Finance said yesterday that it would have to have further discussions with European Union authorities on the matter. The issue has become all the more important in a year when the Government is already borrowing €25bn in the international markets to keep the country afloat. This has been met with a dim view by leading credit ratings agencies.
Meanwhile, NAMA expects to buy the bonds back from the banks over time, as the bad bank generates a return from its activities.
- Maeve Dineen and Joe Brennan
