Civil service move 'led to inflated land prices'
THE Government's decision to announce the locations for decentralised offices gave property owners an opportunity to raise their prices, a senior public servant admitted yesterday.
Former Finance Minister Charlie McCreevy made the surprise announcement in his 2004 Budget that 10,300 civil servants would move out of Dublin to 53 centres in 25 counties.
But Office of Public Works (OPW) chairwoman Claire McGrath yesterday said the Government's decision to announce the locations meant a "signal" was sent out to property owners there.
"That's how it was chosen to be, we didn't have the facility to determine that we don't like a price here, what the market is saying in the location, and we're going to choose to go to somewhere else. We had to give effect to the government decision," she said.
So far, the State has spent €354m on sites, buildings and office leases for decentralised staff and has earned €356m from selling off its former offices in Dublin. Just 4,000 of the planned 10,300 civil servants will have moved by the end of this year, with the decentralisation project now put on hold.
At the Dail's Public Accounts Committee, Fine Gael TD Jim O'Keeffe said that the OPW had been forced into locations to a large degree in a public way and that this had sent a "signal to lift the prices" to the market.
Ms McGrath denied the OPW had paid "over the odds" for decentralisation properties but admitted that the announcement of the locations could have had an effect on prices.
"One would have to accept that where you're announcing that you're coming, that that may have an impact in the market in that location. You have to say in certain of the locations, there were a very small number of sites which might be suitable for what we require," she said.
The OPW may eventually have to dispose of some properties which have not been used so far -- such as a site in Mullingar bought for €8.2m.
When asked if the OPW would get far less than it had paid for the decentralisation sites, Ms McGrath said that she accepted the markets had "moved".
Committee chairman Fine Gael TD Bernard Allen called on the Department of Finance to co-ordinate an investigation into one of the decentralisation decisions that did not go to public tender -- the payment of €1m by FAS to a building contractor to fit out the offices he was leasing to FAS in Birr, Co Offaly.
At the committee, Ms McGrath also defended the decision to award the contract to build and run the National Convention Centre in Dublin to a consortium whose bid was almost €180m higher than the alternative.
She said the winning bid by Spencer Dock Convention Centre Dublin, part of businessman Johnny Ronan's Treasury Holdings group, had a more focused marketing strategy to attract international business conferences to Dublin.
The total cost to the State when it takes over the centre in 2035 will be €713m.