€33m deal fell through because too many state agencies involved
Published 31/01/2014 | 02:30
A SENIOR government official has admitted an aborted land swap deal that cost taxpayers more than €33m floundered because there were too many government bodies involved.
The comments came as the Dail's spending watchdog investigated the outcome of a High Court case which saw developers Durkan New Homes awarded €32.6m and as yet undetermined legal costs after the State failed to transfer the site of the former Harcourt Terrace garda station to the firm in return for the building of 215 affordable homes.
The deal for the site in Dublin fell through due to delays in organising alternative accommodation for the gardai stationed there.
Department of Environment secretary general Geraldine Tallon said: "Hindsight is 20/20, but I do very deeply regret how this has turned out."
She said there were several government bodies involved, including the now defunct Affordable Homes Partnership, the Office of Public Works, the Department of Environment and the Department of Justice.
"Ultimately you need a single authority who is calling the shots," she told the Public Accounts Committee. "I think we all have to take responsibility for how things have turned out."
The committee heard the Department of Environment went ahead with the deal, despite warnings from the OPW that there were risks involved.
The OPW warned in 2006 that it could take at least three years to move the gardai from Harcourt Terrace to a proposed divisional headquarters at Kevin Street.
However, despite this, the department entered into a deal to provide Durkan New Homes with vacant possession of the site by the end of 2008. In 2009, there were efforts to strike a deal where the garda station would be transferred to the building company and be leased back by the State for five years.
But when this had not been completed by the following year, Durkan New Homes took a High Court case for compensation, which it won.
The Department of the Environment has previously told the Comptroller and Auditor General it had made repeated requests to the OPW to finalise the transfer deed for the garda station before the end of 2008.
But there were delays in finding alternative accommodation for gardai at Kevin Street.
In the end, Harcourt Terrace garda station remained occupied until 2012. It now houses a national school.
Committee vice-chairman Kieran O'Donnell raised questions over whether sufficient "due diligence" was done before the deal was entered into.
He also asked if the agendas of different state agencies had got in the way of each other.
OPW chairwoman Clare McGrath denied this had been the case, saying everybody had been working towards the same goal.
She admitted, however, that the OPW had expressed concerns about the timeline involved and that "lessons need to be learnt."
The committee heard the sum awarded to Durkan New Homes was now being paid directly to NAMA. It will be paid – on a 60-40 split between the OPW and the Department of Environment – over the next five years.
The value of the site when the initial deal was struck was €18m, but the committee heard it was now about €5m.