NAMA builders can still apply for state contracts
Published 02/03/2010 | 05:00
CASH-strapped builders whose toxic loans are heading into the State's bad bank are not exempt from being awarded multimillion state contracts.
The revelation comes after it emerged that Gerry Gannon, a member of the so-called Anglo 10 whose loans are heading into the National Asset Management Agency (NAMA), has been awarded a €20m storage contract for the National Museum.
The Department of Finance last night said that despite the plans for NAMA, which is designed to purge the banks of billions in toxic developer loans, the Government cannot discriminate in the awarding of state contracts.
"The fact that a developer has a loan transferred to NAMA does not necessarily preclude the developer from tendering for government projects," a spokeswoman told the Irish Independent.
"All government contracts are in the first instance subject to EU tendering rules."
Mr Gannon's 195,000 sq ft site at the former Motorola operations in Swords will be used for the storage of artefacts by the museum.
The Office of Public Works (OPW) said eight locations in total were reviewed on behalf of the museum before the Swords site was chosen in 2008.
It confirmed it had negotiated a 12-month rent-free period with the developer, with the rental agreement working out at €5.13 per sq ft.
The deal also includes a lease-break option after 10 years and a rent review after five.
The Swords plant was chosen by the National Museum of Ireland as the "best fit for their requirements" which include environmental control faciities.
Museum operators were looking for a single site to locate its various collections, which are currently stored in four separate bases, and also for improved curator and ancillary facilities.
The new site will be available in May after Mr Gannon completes an upgrade.
The Roscommon-born developer paid €12m for the site. He will have earned €20m in rent from it by 2030.
Mr Gannon refused to comment on the details of the deal last night. "I don't want to talk about that," he said.
Mr Gannon is one of the country's biggest developers with loans heading into NAMA. He became one of the poster boys of the Celtic Tiger after he amassed millions in the boom.
In 2008, his wealth was valued at more than €180m, but his fortunes have taken a battering with the collapse of the property market.
The former bricklayer, who is often seen in his trademark trilby hat, was outed as one of the so-called 'Anglo Golden Circle' -- a group of 10 businessmen who bought 10pc of the now-nationalised Anglo Irish Bank from billionaire Sean Quinn, using funds supplied by the bank, in the summer of 2008.
He is also co-owner of the K Club with Michael Smurfit.
The State's so called 'bad bank' got the green light from the European Commission last week. Over the next few weeks, €16bn in loans linked to the biggest 10 developers in the country will be transferred to the agency.
NAMA assets will range from top-end London hotels to unfinished homes on ghost estates. The Government has vowed to pursue developers for their debts.