The Government was warned by the Dublin Port and Docks Board in February that some of its lands were at risk from land speculators. Mark Hennessy and Liam Reid report.
In a six-page paper, Dublin Ports and Docks Board said it had to "effectively control" the port's lands, and the length of contracts enjoyed by tenants.
"Without these fundamental controls, the existing legislation may have the effect over time of reducing the port companies' estates," it declared.
The document, seen by The Irish Times, urged the Department of Communications, Marine and Natural Resources to give the port the same legal protections enjoyed by the Dublin Airport Authority.
"Existing tenants are behaving speculatively in disposing of port lands, having obtained planning permission for alternative uses," the port's legal advisers said.
One company, South Wharf plc, last week confirmed it had moved to acquire 25 acres of Ringsend land owned by the port, worth up to €300 million, for just €750,000.
Last night, Fine Gael TD John Perry said Minister for Communications, Marine and Natural Resources Noel Dempsey had failed to act to protect the State.
"He has allowed a situation to arise where the State and taxpayers are now exposed to a potential loss of an asset worth €300 million," said the Sligo/Leitrim TD.
The lands have been occupied by the company and predecessor, the Irish Glass Bottle Company, for 40 years on a 99-year lease.
The legal advice was given to Mr Perry and other TDs on July 12th by the port's chief executive, Enda Connellan, when he briefed them on issues facing the port.
Port lands were rented on 99-year leases at low charge, though the lettings were conditional on the lands being used only for port business.
"The covenants relating to matters other than directly with the property itself are being challenged by tenants seeking commercial advantage within the existing statutory and common law framework," it said.
Legislation enacted in 1946 guaranteed the port authorities could take back lands from companies using lands improperly. However, the Harbours Act 1996 failed to offer the same protection, though it gave them powers to acquire land compulsorily.
Under a loophole in the Landlords and Tenants Act which is being exploited by South Wharf, companies can sublet lands and then seek to acquire the freehold for 15 times the annual rent. A landlord may not unreasonably withhold consent from a tenant who wishes to use the property for other purposes.
After the closure of the Irish Glass Bottle Company, South Wharf wanted to use the lands for general warehousing, but Dublin Port refused. The issue went to court, but Dublin Port won.
Between 2003 and 2004, South Wharf and the port discussed a joint development on the site, but they could not agree about the split. In early March, the port company moved to evict South Wharf, even though they have another 50 years on their lease.
In May, a company on the Clonshaugh Industrial Estate forced the IDA to sell the factory it occupied for a cheap price, when it sublet the lease and moved to acquire the freehold.
The Department of Enterprise, Trade and Employment moved to close the loophole to protect the IDA, Shannon Development and Údarás na Gaeltachta.
On June 28th, the Department of the Marine made an emergency amendment to the Maritime Security Bill to protect Dublin port.