Wednesday, 14 October 2009
Dáil Eireann Debate
105. Deputy Phil Hogan asked the Minister for the Environment, Heritage and Local Government if he directed the Dublin Docklands Development Authority to value its property portfolio using a valuation methodology being used by the National Asset Management Agency instead of current market value; if he is satisfied with the approach taken by the DDDA to value the property portfolio; and if he will make a statement on the matter. [36113/09]
Minister for the Environment, Heritage and Local Government (Deputy John Gormley): I have not issued any direction to the Dublin Docklands Development Authority on this or any other matter. Recognising the current difficulties in securing an appropriate and realistic valuation of property assets under the present extraordinary market conditions, my Department and the Department of Finance met with representatives of the Dublin Docklands Development Authority in July. It was agreed that the authority would await the publication of the National Asset Management Agency Bill 2009 and also have regard to the guidance for the treatment of impaired assets, prepared by the European Commission and the European Central Bank, in valuing its property assets.
The intention was that the authority should have access to the most up-to-date guidance on this issue in finalising its annual accounts for 2008. The valuation of its assets in the accounts is a matter for the authority; the accounts are prepared in compliance with relevant accounting standards and are audited by independent auditors. I understand that the annual accounts for 2008 are now being finalised within the authority and will be submitted to me in the coming days, following which I will bring them to the attention of the Government and arrange to have them laid before both Houses.
Deputy Phil Hogan: Is the Minister aware of any other agency in his Department which produces an annual report without submitting annual accounts at the same time? Is the Minister in favour of using current market value when it comes to the accounts of the Dublin Docklands Development Authority and its various sites or is he in favour of the new NAMA methodology as outlined by the chairman?
Deputy John Gormley: I am not aware of the position of other agencies but I will address the question of whether I favour current market value. If the Deputy is referring to the NAMA way of doing business, it is current market value plus a premium. I understand, and I believe it already has been in the public domain, that the site we are referring to has been written down by approximately 85%, if one is to believe reports seen in the newspapers. I have not received the accounts yet but I understand that is roughly accurate.
There has been significant depreciation in that site, which is to be expected under the current conditions, as we are in extraordinary times and this site was bought at the very height of the boom. We are now at the lowest end of the market. It is to be expected. I hope to receive the full accounts and Deputy Hogan will have the opportunity to go through them in detail. No doubt he will then have the opportunity to put questions pertaining to those accounts.
Deputy Phil Hogan: The Minister should be aware that the decision to use a new valuation model for the 2008 accounts of the Dublin Docklands Development Authority, based on NAMA valuations and methodologies, is a departure. The Minister is wrong when he says it is consistent with good accounting standards. Accounting standards state that valuation methodologies must be fair, true and consistent from one year to the next. Is the Minister concerned about this departure on the basis that all the agencies with land under his remit could be treated in a different way for valuation purposes than heretofore?
Deputy John Gormley: I am not at all concerned. I understand these valuations have been carried out by the reputable valuers Lisneys, who have said that the valuation of this particular site has gone down by as much as 85%. Listening to what some people have said about NAMA, one might think the decrease is 50% but in this case it is not; the figure is 85%, which is unprecedented but the truth of the matter and nothing can be done about it.
The Deputy would be far better off under the circumstances awaiting the publication of the accounts. As I have said to the House, they will be laid before the Houses. I am very concerned about governance issues pertaining to the Dublin Docklands Development Authority and I have appointed a chairperson of calibre who understands the question of corporate governance.  That person has been complimented by the Deputy and will do a very thorough job. The Deputy can be assured that no stone will be left unturned on any matter relating to the Dublin docklands.
Deputy Phil Hogan: The Minister is aware that he has not yet received any valuation under the NAMA methodology but he received a valuation from Lisneys in July. Will he indicate if that is accurate? He has received a valuation so what is in it?
Deputy John Gormley: I have heard from my officials and I will say, for the third time, that as I understand it, the value of this site has depreciated by up to 85%. That is my information and it is accurate. It reflects what I have seen in newspaper coverage as well.
An Leas-Cheann Comhairle: I advise the House that Deputy Joanna Tuffy has indicated she will be slightly late arriving to the House. I have agreed to take her priority question last so with the indulgence of the House, we will now take Question No. 107 in the name of Deputy Phil Hogan.
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