Tuesday 24 April 2018

IDA plans to get tough with business park debtors

Martin Shanahan, chief executive of IDA
Martin Shanahan, chief executive of IDA

Simon Rowe

The IDA is owed €275,000 in overdue service charge fees, dating back more than five years, by companies located in its business parks.

The State agency responsible for attracting inward investment has been trying to slash its service charge debt pile for a number of years but admits that "some of the debtors are in liquidation or receivership, which makes it difficult to determine what the outcome will be."

A total of 16 companies located in 12 IDA business and technology parks owe a total of €274,219 in "legacy debt" service charges, according to figures released under the Freedom of Information Act.

The IDA confirmed that "only when all avenues have been exhausted, and the economic recovery of the debt is not viable or is statute barred, will a debt be considered for write-off."

"Of the remaining €274,219 legacy debt, IDA would hope to recover €50-€100K," the agency added.

The IDA controls a portfolio of 30 business and technology parks dotted around the country.

The issue of legacy debt has figured high on the agenda of its high-powered 10-member Audit, Finance and Risk Committee for the last two years, according to official documents seen by the Sunday Independent.

Since 2010, the IDA has been battling to reduce a massive €1.1m service charge legacy debt pile, recovering €919,178 in the intervening years.

The minutes of a committee meeting in March this year reveal its ongoing efforts to recover debt.

"Estate management debt is under review and Property and Finance divisions are actively engaged in a process to resolve legacy service charge debt that has been accrued by tenants on IDA parks," documents state.

The IDA declined to reveal the identity of any individual debtor firms "for reasons of confidentiality". It also declined to name which IDA business parks are affected. However, in a sign of a new 'get tough' stance on legacy debt, minutes of an Audit, Finance and Risk Committee meeting held last November at IDA headquarters in Dublin suggest that agency bosses are now more willing to take legal action in their battle with debtors.

The minutes note that members "welcomed the proposed debtor legal recovery procedure on service charges".

The State agency recently announced a €150m property investment plan, spread out over five years, to upgrade its business and technology parks and build new advanced technology buildings in regional locations.

The availability of high-quality, managed business parks is seen as a vital component for winning FDI.

Sunday Indo Business

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