Business Irish

Tuesday 24 October 2017

Toxic DDDA may face axe in quango cull

Outcome of case will determine agency's survival

Nick Webb

Nick Webb

THE Dublin Docklands Development Authority, the toxic semi-State quango that has cost taxpayers hundreds of millions through its bungling property speculation, may be targeted for extinction by new environment minister Phil Hogan, according to sources.

The DDDA, now headed up by Niamh Brennan, is a drastically smaller operation than it was during the property boom. But even the decreasing budgets and staff numbers may not save it from Hogan's chopper.

The quango is locked in a major lawsuit with developer Bernard McNamara over the €412m purchase of the infamous Glass Bottler site in Ringsend.

"Hogan is going to let the court make its judgement and then review it," according to one source.

The DDDA was set up to redevelop and re-energise Dublin's docklands areas. However, it would become known as the "downtown branch" of Anglo Irish Bank during the boom years because of its close association with the now nationalised bank. Former Anglo Irish Bank chairman Sean FitzPatrick was a director of the quango, which was chaired by Lar Bradshaw -- also a director of Anglo. Bradshaw was replaced by former PWC chief Donal O'Connor, who would also become chairman of Anglo. FitzPatrick's bank was one of the great beneficiaries of the development of the docklands as it financed many of the major builders who constructed mirrored glass complexes along the banks of the Liffey. Indeed, Anglo was poised to move its headquarters down to the heart of the docklands before the property market tanked, taking the bank with it.

However, it was the infamous Irish Glass Bottlers deal that would ultimately spear the State agency. The DDDA joined a consortium that included Bernard McNamara, Derek Quinlan and clients of Davy stockbrokers to splurge €412m on a site in Ringsend, owned by Paul Coulson's South Wharf and Dublin Port. DDDA would own 26 per cent of the Becbay consortium and would end up exposed to massive losses as property values pancaked. The site is now worth less than 10 per cent of what Becbay paid.

There was enormous controversy when it emerged that Anglo Irish Bank had provided a €288m loan for the purchase of the site, while two of its directors sat on the board of the DDDA. Sean FitzPatrick has said that he was not involved in the transaction, with Bradshaw also insisting that there was nothing untoward about the loan.

The finances of the DDDA have been car-crash viewing in recent years. In 2010, the State agency reported a deficit of €71m, compared with a €186m write-down announced a year earlier. Chairwoman Niamh Brennan apologised for the agency's financial position at the publication of its 2009 annual report last year, indicating that the State body would "redouble" its efforts to break even.

The Government has committed itself to axing some of the hundreds and hundreds of quangos set up as part of the extension of the public sector and the spread of social partnership during Bertie Ahern's period as Taoiseach.

These quangos were often stuffed with party apparatchiks and members of the trade unions.

However, the latest progress report from the Croke Park implementation body has revealed scant evidence of quangos being culled. A move to shut down the DDDA would be the Government's first big scalp.

Sunday Indo Business

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