Ronald Quinlan talks to some developers who fear Nama, and doubt its ability to achieve results

IT'S one of the most important agencies in this country and its success is vital to the future of our economy. But even Taoiseach Enda Kenny is at a loss as to what really goes on behind the firmly closed doors at Nama -- so much so that he dubbed it the "secret society" in the lead-up to last year's general election.

Whenever questions are asked about its activities or dealings with the borrowers on its books, Nama pleads "no comment" or cites clients' rights to confidentially.

Notwithstanding its own commendable discretion, unflattering stories about developers and their antics find their way into the public domain with sufficient regularity to keep the public's anger against them well stoked.

Somewhat coincidentally, in many cases the same stories portray Nama as a no-nonsense, tough and decisive outfit as it forces the sale of yet another palatial home or piece of art as part of its relentless mission to -- as its own chief executive Brendan McDonagh and chairman Frank Daly frequently affirm -- recover the maximum amount of money for the taxpayer.

Such breathless accounts of Nama's enforcement techniques do more than incite the people, though. They also act as a constant reminder to developers to keep their heads down and say nothing about their dealings with the agency for fear that they will be the next one up for eviction from their trophy homes, or to have their vanity paraded for public consumption in the media.

While Nama will insist that it conducts its business on a purely commercial basis and that there is absolutely nothing personal in the manner in which it deals with its clients, many developers -- however rightly or wrongly -- are living in fear of what they now privately refer to as the National Retribution Agency.

"You're not going to get anyone to say a word about them unless they have nothing left to lose. Ray Grehan spoke up, but he'd already declared bankruptcy. If I went on the record to tell you what I really think about Nama, they'd pull the plug on me within the month. I absolutely believe that," one major developer said, describing his fraught relationship with the agency last week.

Speaking on the condition of anonymity, the same developer painted a picture of a grinding bureaucracy that is either unable or simply unwilling to engage with its clients sufficiently to achieve results.

Asked what his experience had been in relation to his own business plan, the developer said: "Nobody asked me any questions about the strategy I had put together for my portfolio. The review was led by accountants, not property professionals. That, to me, was outrageous. There were no meetings about the long-term strategy. It just seemed that the outcome was already predetermined as far as they were concerned. That has been the experience of a lot of other developers."

And even where engagement does take place, it can be a disconcerting experience, he claimed.

"I have heard of meetings that sound more like interrogations. What kind of car do you drive? Sell it! What kind of car does your wife drive? Get rid of it! Sell your house. It's too big. What has that got to do with getting a developer to work out his loans? It's all for show; their show. They do it to keep the newspapers and the politicians off their backs," he said.

Commenting on the lack of interaction with Nama since submitting his business plan, another developer told how his working days could now "easily" be compressed into half an hour, such is the dearth of activity in his companies and within the domestic property sector generally.

"There were some signs of a pick-up in the residential market last year, but it's absolutely dead now. Nama killed everything off last summer when they announced that they were looking at the scheme to kickstart the market by offering negative equity insurance. Anyone who was thinking of buying a house at the time stopped right there and said, 'Let's wait and see what happens.'

"Now it turns out that Nama is waiting for approval from the EU Commission to see if the scheme can go ahead. Would they not have got the EU's approval before they announced it? It's all PR and for show. They wanted to be seen to be doing something and they didn't care what happened to the market in the meantime," the developer asserted.

Another major developer complained of the "mess" Nama was making in its dealings with international wealth funds and other potential foreign investors, whom he said had been interested in buying up properties in Ireland.

Echoing the view expressed by Ray Grehan in his interview with the Sunday Independent last month (a view dismissed by Nama on the basis that Mr Grehan could not considered an "objective commentator"), the developer said: "They're [Nama] getting a reputation for not doing business. Foreign investors are moving on. Dublin, Paris or London: if you were in charge of a fund, where would you be looking to invest your money given what's going on in the world right now? When funds are looking for a decision, they're looking to get it quickly. They're not going to wait forever while the bureaucrats in Nama sharpen their pencils."

While he readily acknowledged that the public might not be inclined to listen to his views, or those of other developers, given the role the property industry played in the destruction of the Irish economy, he added: "I fully accept the damage that's been done here, but I have to ask: can Ireland afford to lose more money than it already has? Nama is destroying the opportunities to bring in foreign money. I heard some talk before Christmas that they're looking to extend Nama's lifetime by 10 years. Are they hoping inflation is going to save them? What are they doing now to save the country?"

Nama responded by saying: "We expected this type of criticism as we make more progress on enforcements and loan recovery from developers and other debtors. The only objective of the agency is to recover money for the Irish taxpayer and we are making good progress on doing that.

"We have very good relationships with international investors but we have made it clear to them that we are not prepared to sell assets at ridiculous prices and they understand that. This is a ten year project.

"The agency has approved sales of over €6bn of assets already. It has advanced hundreds of millions of euro to developers to support worthwhile projects -- including €71m in Q3 of last year alone. It has repaid €1.6bn in debt and it has over €3bn in the bank."

But another developer who spoke to this newspaper took the time to examine Nama's latest quarterly accounts, which were released last Tuesday.

And while he readily accepted that the agency had recorded an operating profit for the period up to last September of €526m, he poured scorn on its efforts to suggest that this should be taken as a proper measure of achievement.

"Those profits are coming off the back of selling some of the best assets on the books, prime properties in London where the market hit another peak and is now cooling off. What assets are going to be left in Nama? What are they saying it's worth? And what is it really worth if you marked it to market?

"When Nama took over the loans from the banks, they had a face value of €71.2bn. They're worth about €64bn . . . now. That's €7.2bn down in two years. What does Nama really expect to recover for the taxpayer, and how do they expect to recover anything if they're unable to negotiate with people who have money?

"Who's going to write the cheque when Nama loses half the €30bn that it paid the banks for developers' loans? This could bankrupt the country once and for all."

Originally published in