Press Release: Special Report on Dublin Docklands Development Authority
The Comptroller and Auditor General was appointed the auditor of the Dublin Docklands Development Authority (the Authority) beginning with the financial year 2010. The audit on the Authority’s financial statements for 2010 was completed on 7 November 2011. The audit of the 2011 financial statements was completed on 8 May 2012.
The Office of the Comptroller and Auditor General has today published a special report on the Authority. The special report was completed by the former Comptroller and Auditor General, Mr John Buckley, prior to his retirement in February 2012.
The purpose of the report is to give a fuller account of
- the overall financial status and administration of the Authority
- the Authority’s investment in the Irish Glass Bottle site
- how the Authority’s planning function is being administered.
Financial Status of the Authority
The audit report on the 2010 financial statements of the Authority drew attention to the fact that it had current liabilities of €32 million at the end of 2010. The Authority’s capacity to fund itself was dependent on the availability to it of banking facilities until such time as it can liquidate its property assets and collect its debts. The same basic position pertained at the end of 2011.
The Authority has down-sized significantly in recent years. Average staffing levels fell from 55 in 2008 to a planned level of 15 for 2012. The report recognises that the same level of separation of function and supervisory control may not be achievable with current staffing levels. Accordingly, the Authority may need to review its risks and controls with a view to achieving the optimum level of control within its current resources.
Irish Glass Bottle Site
The failed venture to develop the Irish Glass Bottle site on the Poolbeg peninsula has impacted on the Authority’s financial position. In January 2007, the Authority, together with two venture partners, purchased the Irish Glass Bottle site through a company called Becbay Limited. The purchase price of the site was €412 million. Stamp duty, professional fees and arrangement fees for the banking facility resulted in a total site cost of €431 million and further costs were incurred on site remediation. The site was valued in January 2011 at €45 million.
The financial exposure to the Authority was limited to an equity investment of €33 million and guarantees of borrowings up to €29.1 million plus interest, a potential exposure up to the end of 2010 of €81.9 million. The Authority’s investment in Becbay Limited has been fully written off, and Becbay’s loans have been taken over by the National Asset Management Agency (NAMA). Following mediation between the Authority and NAMA, a settlement was agreed in July 2011 under which the Authority agreed to transfer to NAMA a portfolio of property assets with a net book value of €7.8 million (at end 2010) in settlement of the guarantee. Ultimately, the cost to the Authority of the venture, following the settlement with NAMA, was €52.1 million.
The Department of the Environment, Community and Local Government and the Department of Public Expenditure and Reform issued authorisations for borrowing by the Authority and its participation in the joint venture. There was no evidence that the full scale of the planned outlay on the site acquisition by the joint venture company was made known to the Departments at that time.
Administration of Planning Function
The Authority has planning and development functions in relation to over 500 hectares of land in the Dublin Docklands. It may issue certificates of exemption for planning applications that comply with the Authority’s planning schemes referred to as Section 25 applications.
The Authority issued Section 25 certificates that allowed for development of between 120,000 m2 and 140,000 m2 of commercial space each year in the period 2005 to 2007. Very little additional commercial space has been permitted under Section 25 certificates in the period 2009 to 2011.
In October 2008, the High Court found against the Authority in regard to its handling of a Section 25 planning application for 51,300 m2 of commercial space made by a development company, North Quay Investments Limited. The Authority subsequently amended its Section 25 process. Following a formal review commissioned by the Authority, the revised procedures were found to be satisfactory. The revised process has been applied to all Section 25 planning applications since December 2008.
Notes for Editors
The Comptroller and Auditor General is an independent constitutional officer with responsibility for the audit of public funds. He reports to Dáil Éireann.
The full text of the report is available on the website of the Office of the Comptroller and Auditor General (go to www.audgen.gov.ie).
For further information about the report, please contact Peter Kinsley at (01) 603 1037 or at Peter_Kinsley@audgen.irlgov.ie