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Tuesday 20 March 2018

Taxpayers now face losses of up to €375m on council land deals


Huge sums paid out for unused social and affordable housing sites during boom

The taxpayer is facing losses of up to €375m on lands bought by local authorities for social and affordable housing that were never built upon, the Sunday Independent can reveal.

According to figures given to the Public Accounts Committee (PAC) by the Department of the Environment, €500m of taxpayers' money was used to purchase lands at inflated prices in counties all over Ireland, which to date remain idle but are facing value reductions of 75 per cent.

In a scheme described as 'Nama for local authorities', the previous government sought to rescue the balance sheets of local authorities across Ireland who had bought the land during the boom.

The Land Aggregation Scheme was established to remove councils' debts and the Housing Agency pays local authorities for the land -- when it has been decided that it will not be developed -- and takes control of it.

According to the figures given to the PAC, a total of 262 sites across Ireland were bought for €500m.

But not all these lands have been transferred into the Housing Agency -- so far 115 sites have been submitted to the department, with a loan value of €260m.

These include 47 sites which have been approved for inclusion in the Land Aggregation Scheme, with loans totalling some €110m.

The Housing Agency said no valuations had officially been done on the lands purchased but members of the PAC revealed they had been informed the land is worth at best €125m -- which means a loss of €375m to the taxpayer.

Fianna Fail TD Sean Fleming said: "When all these lands are transferred, the State will have paid €500m on land that is worth less than 75 per cent of what was paid. The taxpayer is nursing a loss of €375m.

"All of this land is of lower quality than much of what went into Nama -- greenfield sites that will never be developed," he added.

The figures show that Dun Laoghaire-Rathdown County Council paid €8.8m in total for a 2.8 hectare site in Sandyford, Dublin, which works out at a staggering €2.75m a hectare. The land was bought in 2001.

In Naas, Co Kildare, the town council paid €8.8m for a 5.2-hectare site for development, or €1.57m a hectare, while in Carlow, €3m was paid for a two-hectare site in 2007, or €1.5m a hectare. These lands are lying idle and in places could be worth as little as €7,500 an acre.

Mr Fleming said it was baffling that we now had three State agencies -- Nama, IRBC and now the Housing Agency -- competing to offload or manage huge land banks.

Despite Mr Fleming's comments, a spokeswoman for the Housing Agency said: "No current valuations have been carried out on the land that is being transferred under the Land Aggregation Scheme. What you are proposing to write, as outlined, is incorrect."

The latest revelation follows on from our story last week, in which it emerged that taxpayers paid €43m for lands earmarked for decentralisation, which are now worth just €500,000.

The Office of Public Works was heavily criticised by several members of the PAC, including Fine Gael's Kieran O'Donnell, who conducted the analysis of the land deals, and its chairman, John McGuinness.

Sunday Independent

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