Records on DDDA’s exposure to Irish Glass Bottle site ‘ambiguous at best’

Records taken in advance of the Dublin Docklands Development Authority’s (DDDA) purchase of the Irish Glass Bottle site regarding its potential financial exposure were “ambiguous at best”, the Comptroller and Auditor General said yesterday.

At the Committee of Public Accounts yesterday, Séamus McCarthy said the former chief executive of the DDDA, Paul Moloney, had, in evidence and in subsequent correspondence, taken the view that the executive board was "fully aware" at a meeting on November 2nd, 2006, "that they were agreeing to a financial exposure for the authority in excess of €61 million".

Increased exposure
The C&AG said Mr Moloney's position "appears to be that the executive board decided in less than two weeks to increase the authority's financial exposure to the joint venture from €9 million to over €61 million".

Mr McCarthy said that, on reviewing the minutes of board meetings and records around the decision, he had noted the following key points:

n Board minutes of October 20th, 2006, recorded that the authority’s equity contribution to the joint venture would be €9 million, to be provided from existing resources, and that the remainder of the required funding would be raised through bank borrowing secured solely on the Irish Glass Bottle site.

n Board minutes of October 24th, 2006, stated that the director of finance outlined to the board that the maximum liability to which the authority would be exposed was €36 million and it was on this basis that the decision to make the bid was made.

n Board minutes and related records from November 2nd, 2006, included references to guarantees to be provided by the authority in relation to proposed borrowing subject to upper limits being set in relation to the potential liability arising from the guarantee.

A related board paper referred to the proposed guarantee provisions increasing the liabilities to the authority. He said estimates of the increased exposure were not given but a limit of €35 million was mentioned.

The C&AG described the records kept by the authority in relation to the executive’s board’s decision as “ambiguous as best”, adding: “Evidence from members of the board may ultimately be required to clarify the matter.”

The Irish Glass Bottle site, purchased in 2006 as part of a joint venture, resulted in the eventual loss to the authority, after the transfer of loans associated with the deal to the National Asset Management Agency, of €52 million.

'Absolute disgrace'
The vice-chairman of the committee, Kieran O'Donnell, said the accumulated loss to the taxpayer from development projects entered into by the DDDA was €185 million, which he described as an "absolute disgrace". These included the Irish Glass Bottle site, the CHQ development at Custom House Quay and a development in the North Lotts area.

Separately, the committee is to contact Mr Moloney in relation to credit card expenses, including what a PAC member called“significant amounts” being spent in restaurants and other venues.

At a committee meeting on December 12th, Mr Moloney told members: “I have never seen credit card expenses being submitted.”

However, Eoghan Murphy of Fine Gael said Mr Moloney "subsequently wrote back to us to say that he did have one but he had forgotten that at the meeting".