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Thursday 27 July 2017

Insolvent builders owe councils €250m

Craig Hughes

ALMOST a quarter of a billion euro is owed to local authorities nationwide from insolvent developers in unpaid development levies, according to new figures compiled by the Sunday Independent.

The multi-million euro debts accumulated by some of the country's biggest developers to the 34 county and city councils have mostly been written off by the local authorities.

However, a spokesman for the Department of Environment, Heritage and Local Government indicated that local authorities would be pursuing the developers for all of the debt owed.

"Where any payments required in respect of development contributions are not settled, such payments may be pursued by the planning authority through the courts as a contract debt," he said.

Yet despite the department's instructions this is not happening, with some local authorities deciding to write off large quantities of the debt.

Fingal County Council is owed more than any other local authority nationwide, with €68m owed from 75 developers who cannot be named. In the Dublin region unpaid levies amount to €151.7m for the respective four councils.

A spokeswoman for Fingal County Council insisted the authority was pursuing all of the debt and was constantly liaising with developers in an attempt to recoup all monies owed.

"Where necessary, we liaise with developers and individuals to agree a schedule to ensure that all monies owing to Fingal County Council are paid," she said.

However,many developers have been left insolvent after the collapse of the property market. Furthermore, portions of the debt owed relate to developments which have not yet commenced -- with councils left hoping development eventually occurs if they are to have any chance of recouping the debt.

In such cases developers are seeing their payments being deferred indefinitely by councils, meaning that some authorities are essentially writing off the debts by not setting a deadline for payment. Fine Gael's local government spokesman, Phil Hogan TD, called on the Government to abolish development levies in an attempt to increase job creation in the construction sector.

"There isn't any point in development levies in the first place because they discourage development, especially at a time when we are attempting to get as many people back to work as possible," he said.

"In regards to outstanding debt, councils should be given authorisation by the minister to enter into negotiations with these developers to seek equity in exchange for the debt and used for social housing," he added.

Development levies vary drastically from the minimum charge of €34 to the maximum of €28,000.

The levy is calculated based on the size of the development as well as the public facilities the development will benefit from such as roads, water, sewage, parks and any other facilities provided by the council.

Sunday Independent

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