New land agency could lose powers over EU rules fear
Attorney General's warning about powerful new State body
The Government's mammoth new land agency could be forced to water down its powers significantly over fears it will be in breach of EU competition rules.
The Land Development Agency (LDA) was intended to have sweeping compulsory purchase order powers to buy land banks to ensure the country was prepared for a future property crash.
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However, it has now emerged the agency could be stripped of these powers before the body tasked with providing land for 150,000 new homes is enshrined in legislation. The Sunday Independent has learned serious concerns were recently raised about the establishment of the LDA by Attorney General Seamus Woulfe.
Mr Woulfe warned Cabinet colleagues three weeks ago that allowing the LDA acquire State-owned land at no cost could be a breach of the strict EU rules on state aid which prohibit governments from giving state agencies an unfair advantages over commercial competitors.
The Attorney General also said giving compulsory order powers to what is supposed to be a commercial State agency could pose significant legal problems for the Government as it would clearly give the LDA a clear advantage over competitors.
Mr Woulfe also said the Government should contact the EU Director General for Competition to seek its view on the proposed legislation governing the LDA.
Meanwhile, Minister for Housing Eoghan Murphy and Minister for Finance Paschal Donohoe, who are responsible for establishing the agency, have conceded to reviewing plans to give LDA compulsory purchase order powers to buy up swathes of land around the country.
Legislation providing for the powers is now being reconsidered and it is likely the LDA will only have limited, if any, compulsory purchase order functions when it is officially established.
The Government is also reviewing how the LDA can acquire land from other State agencies without breaching EU rules.
The agency has already been granted access to State-owned sites including the Central Mental Hospital in Dundrum, Dublin, the former Meath Hospital in Dublin, St Kevin's Hospital in Cork, Devoy Barracks in Kildare and Columb Barracks in Westmeath, as well as two other sites in North County Dublin.
However, the LDA will not officially own the sites until legislation is eventually passed by the Dail.
It also remains unclear whether the LDA will pay other State agencies for sites it acquires from them or if a complex arrangement involving equity shares will be introduced to ensure EU competition rules are not breached.
A Department of Housing spokesperson said: ''In establishing a new State agency from scratch there are always a number of issues that must be worked through.
"Work will continue on working all elements of the LDA out with a view to having legislation ready for pre-legislative scrutiny in September."