independent

Sunday 20 April 2014

Former docklands boss: I did not mislead Government on Irish Glass Bottle deal

The former Irish Glass bottle site at Ringsend...HN

THE former chief executive of the Dublin Docklands Development Authority has denied misleading the Government over the value of the controversial Irish Glass Bottle site when the DDDA was seeking ministerial approval to increase its borrowings.

A letter dated October 2, 2006 bearing Paul Maloney's name informed the Department of Environment that a consortium it was involved in planned to pay only €220m for the site.

However, within a month of the letter, the Becbay consortium, involving developer Bernard McNamara and the DDDA, bid €412m to buy the ill-fated site in Ringsend.

The deal proved disastrous, with the value of the land collapsing to just €45m and Becbay's loans being taken over by NAMA, which liquidated the company.

Mr Maloney told the Dail's spending watchdog that even though his name was on the letter, he was not the author of the letter, did not see it before it was sent and did not sign the letter.

He said it had been sent by a junior colleague early in October 2006.

Later that month the DDDA received ministerial approval to increase its borrowing limit to €127m, based on the €220m valuation.

Mr Maloney told a hearing of the Public Accounts Committee he became aware a few days later that the incorrect sum was in the letter. He said he immediately corrected this at a board meeting, where he gave board members, including a representative of the Department of Environment, an estimated sale figure of €375m.

However, Comptroller & Auditor General Seamus McCarthy told the committee it was clear from correspondence between the Department of Finance and the Department of Environment that officials approved higher borrowing limit on the basis of the €220m valuation.

In the end the DDDA lost €52m as a result of borrowing for the deal and the Government decided to begin the winding up of the authority.

Mr Maloney accepted the department had been working with the wrong figures when it approved the borrowings.

However, he said that at the time he was "quite comfortable that the department knew" the correct valuation.

The committee heard that the €375m valuation was not an independent one, but was reached by professional surveyors inside the authority.

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