Taxpayer to stump up for rescue of Docklands body
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Thursday November 26 2009
THE Government is set to bail out the body in charge of building up Dublin's docklands because of its disastrous property deals.
The Dublin Docklands Development Authority (DDDA) will record a €27m loss when its annual accounts are published today. It is understood the authority has already had to borrow money just to pay the wages of its staff.
The Irish Independent understands the Government is planning a massive injection of taxpayers' funds to rescue the troubled state body as soon as it receives a detailed rescue plan from the board.
The Government is awaiting a detailed rescue plan from the DDDA's new chairwoman, Professor Niamh Brennan -- wife of former PD leader Michael McDowell -- which will set out the funding required by the body to survive.
The DDDA has already been forced to lay off staff and it took a major hit when it took a 26pc stake in the €412m purchase of the Irish Glass Bottle site in Dublin in 2006, which has since fallen in value by 85pc due to the property crash.
Demanded
As it is a state body, it cannot be allowed to go bust without paying its debts. But the Government is hoping that the DDDA will be able to repay the money in a number of years.
Yesterday Fine Gael leader Enda Kenny demanded to know the Government's plans to save the DDDA from bankruptcy.
"It now appears as if the Government are going to have to bail out the Dublin Docklands Development Authority to the extent of €27m, which resulted from the involvement of bankers and developers in the unregulated and unsupervised purchase of assets like the glass bottle site," Mr Kenny said.
The decision to acquire the site has been mired in controversy due to the fact that Anglo Irish Bank supplied some of the funding -- at a time when its then chairman Sean FitzPatrick was also a board member of the DDDA.
The DDDA was set up in 1997 by the Fine Gael-Labour 'rainbow government' to redevelop 1,300 acres in Dublin's dilapidated docklands. It has attracted more than €5bn in private and public investment and has, until now, been self-financing. As recently as last March, Environment Minister John Gormley predicted this would continue to be the case
"I expect the Authority's 2008 accounts, which will be submitted to me before end-June, to show that the authority continues to be self-financing," he said.
Troubling
But, by last May, there were troubling signs emerging with DDDA minutes of meetings showing that the board requested management last May to bring the DDDA's finances into a break-even position "with immediate effect".
"Every discretionary expense has been reduced but, to achieve break-even, further cancellations or deferral of projects would have to be considered."
Mr Gormley confirmed in the Dail this week that there will be a €27m operating loss. The DDDA accounts published today are expected to show a €190m writedown on lands it holds, leaving the authority with overall liabilities of €50m.
The DDDA can borrow up to €127m with the permission of Mr Gormley and Finance Minisiter Brian Lenihan but it has not yet revealed if it has sought to use this facility.
The DDDA is one of the few state agencies which does not have its accounts checked by the Comptroller and Auditor General, the state spending watchdog. But yesterday, Taoiseach Brian Cowen gave no commitment to put the authority under the Comptroller and Auditor General's scrutiny.
- MICHAEL BRENNAN
Irish Independent
