Report raises issues about Dún Laoghaire harbour ownership

Council to debate due diligence report which raises issues about valuations and pensions

The due diligence report said Dún Laoghaire Harbour Company “has reasonable governance policies and it adheres to good governance procedures whilst conducting its affairs”. Photograph: Eric Luke

The due diligence report said Dún Laoghaire Harbour Company “has reasonable governance policies and it adheres to good governance procedures whilst conducting its affairs”. Photograph: Eric Luke

 

Questions about the ownership of key aspects of Dún Laoghaire harbour and potential demands for repayment of European Union grants have been raised by a due diligence report on the harbour company.

The report was commissioned from consultants LHM Casey McGrath by Dún Laoghaire-Rathdown County Council after the Government enacted legislation in 2015 to transfer control of the harbour to the council.

The report on Dún Laoghaire Harbour Company, which will be debated by councillors on Monday night, also raises issues about valuations of the company’s €38.3 million asset portfolio, a pension fund deficit and legal costs.

It lists a number of projects which have been put forward by the harbour company which are in various stages of progression. These include an Irish international diaspora centre, an east pier urban beach, a proposed cruise facility and a marina village at the west pier.

‘Bizarre practices’

Local TD Richard Boyd Barrett said the report raised “bizarre practices” and said the People Before Profit group on the council would push for the dissolution of the company, rather than its incorporation into the council’s corporate structure.

The due diligence report said “the company has reasonable governance policies and it adheres to good governance procedures whilst conducting its affairs”.

It also noted the company was in discussions with no fewer than four ferry operators to have a new fast ferry service in place by mid-2018.

But it identified “ownership-related issues” at St Michael’s pier, where a lot of development is planned, including the diaspora centre, the cruise berth and the fast ferry. While the harbour company had legal advice that it owned the foreshore, “it appears that the company’s ownership has not been accepted or recognised by the Chief State Solicitor”, the report said.

In relation to valuations, LHM Casey McGrath said estate agents had valued Block 2 Harbour Square at €7.456 million, in December 2014. But this block was revalued the following year at €10.5 million. The report concluded it was “unusual” to have an asset revalued after 12 months and the effect was to increase the company’s profit-and-loss account by more then €3 million.

A separate valuation of the ferry terminal building set its value at September 2015 at €19 million. But a value of just €5 million was recognised in the financial statements for the year ended December 2015. This resulted in a drop in the profit and loss account of almost €14 million, the report noted.

Staff pensions

In relation to staff pensions, the report noted that if the company was dissolved under the Harbours Act 2015, a liability to the pension fund of up to €3.4 million “may” become payable.

The report also warns parts of EU grants amounting to €11.2 million “could be the subject of a clawback from the EU”. The report said the accounts made no provision for the possible clawback of Government grants.

Gerry Dunne, the harbour company chief executive, said there were “no surprises” in the issues raised, which were all matters being worked on by the company. He said the report was commissioned by the council and was “really a matter for the council” at this stage.