Cowen under fire on land deal
He gave body go-ahead to borrow €127m
TAOISEACH Brian Cowen was facing intense pressure last night over his involvement in a major land deal which cost €200m more than the property was initially valued.
Mr Cowen allowed the Dublin Docklands Development Authority (DDDA) borrow up to €127m towards the purchase of the Irish Glass Bottle site in 2006, based on an estimate that the land would be worth €220m.
But within days of the decision, the site was bought by the DDDA, in partnership with businessmen Bernard McNamara and Derek Quinlan, for €426.8m.
The disclosures have raised serious questions over Mr Cowen's judgment, with taxpayers now facing the prospect of a €500m hit after the value of the site collapsed. Mr Cowen was already under intense pressure before yesterday's revelations, with growing dissatisfaction among government backbenchers about his leadership.
The Taoiseach last night failed to answer a series of queries submitted by the Irish Independent about the affair.
As Minister for Finance at the time, his approval was essential before the DDDA could borrow from Anglo Irish Bank to fund its 26pc stake in the site. Internal Department of Finance documents released to Fine Gael under the Freedom of Information Act indicated the decision to give the DDDA permission to draw down the loan was rushed through after being considered for just 14 days.
The DDDA told the Department of Finance the Irish Glass Bottle site would be worth €220m once fully developed.
However, the Department of Finance did not request a formal valuation which may have given a truer picture of what the site would have sold for.
The documents also suggest that Mr Cowen and the department did not do due proper diligence before allowing the DDDA draw down the loan.
Although some officials raised concerns over the ability of the DDDA to repay the loan, it was ultimately recommended to Mr Cowen that he could sanction the borrowing on the basis that the DDDA was self-financing and would be able to repay the money. However, a leaked report revealed earlier this week that the DDDA was now financially crippled by having to meet a €5m-a-year interest bill and had written down the value of its share in the site to nil.
Mr Cowen refused to say last night whether he now believed the advice of his officials had been flawed.
A spokesman for Mr Cowen said the Taoiseach had absolutely no difficulty accounting for any decision he took while holding ministerial office, He said any decision Mr Cowen took as finance minister was based on the best advice available to him.
The spokesman said Mr Cowen was adamant he had no role in sanctioning the purchase of the Irish Glass Bottle site. He said Mr Cowen's only role was to give consent to the DDDA to borrow up to a €127m limit set down in legislation.
However Fine Gael environment spokesman Phil Hogan accused Mr Cowen of "dodging the truth of the matter".
"If the Minister for Finance had not signed off on the purchase of the Irish Glass Bottle Site, the DDDA could not have taken part in the deal. He had to specifically approve the borrowing for the purchase," said Mr Hogan.