Mr. Edmund Honohan:

Again, a number of different questions arise. Private finance initiatives, PFIs, are the English equivalent of public private partnerships, PPPs, and they were John Major's idea. Deputy Wallace is saying that Europe says that if we want the 1% deal, we have to do it the PPP way. Somebody else described PPP as welfare for capitalists. There are huge profits to be made out of PPP and this country needs to turn its back on PPP. It needs to say that it was an interesting idea for the 1980s and now we want to take social control of what we are doing here. I do not feel Europe is entitled to refuse us the money at 1%. There may be EUROSTAT problems - there are EUROSTAT problems about everything nowadays - in terms of the fiscal rules, which most people are now breaking, but we need to assert the right of the Irish Government to attend to a national crisis in as economic and efficient a way as possible. The immediate seizure of the vacant properties is certainly an economic and efficient way.

There is an American proposal here, which I dug up:

It is a real estate crisis we are living with [...] The Plan grows from this simple fact. It is accordingly for municipalities, or joint powers authorities (JPAs) that they or their states establish to enable coordination among multiple municipalities, to discharge their legally appointed function by customary, legally familiar means.

This is American law. The terminology is different, but the concept is the same. It is the idea that in order to call a halt to the decimation of American states because of sub-prime lending and so forth, it was necessary, or it would be desirable, to acquire all the loans on a co-operative basis and then renegotiate all the terms on a restructured and sustainable basis. As regards the actual price that might be paid, it does not seem to me that there is any advantage in trying to work out a formula by which they get an extra 5% or something like that.

The official arbitrator is set up under the 1919 Act - it goes way back. He has all his little rules and actually I have been in several cases myself where I have been disappointed with the result from the official arbitrator where he has awarded less than I thought he was going to give for market value. In other words, it is very tight, and the official arbitrator would look very clearly at how much was actually paid for this property 18 months ago or two years ago and how much one could sell it for now as part of a portfolio.

I do not know whether Deputy Wallace has been following the controversy about the listing of properties in portfolio sales. There is some problem with the Property Registration Authority - it has 7,000 properties on a particular transfer and is now refusing to release that deed - but in each document it records the price for each property sold and the prices that are recorded are quite astonishing. I came across one case the other day where two apartments owned by an investor, one in Templeogue and one in Tallaght or somewhere like that, were being repossessed. The price for the one in Tallaght was €151,900 and the price for the one in Templeogue was €151,900. This is a completely artificial means of apportioning a huge, multimillion pound pay cheque. The figure is just plucked from the air; one cannot imagine the receiver and the American fund sitting down and one saying it will not pay more than €152,000 and the other saying it definitely has to receive €152,000 for the apartment in Templeogue. These are just figures that are plucked from the air and there is an element of artificiality about them.

That is where there may be the possibility of the arbitrator saying, "Now, come off it lads, how much is this really worth? What kind of condition is it in? Did you have a valuation done?" and so on. There is definitely the possibility of prolonged argument about how much the properties are worth but what is interesting about a CPO is that once one serves the notice to treat, that is, once one sends out the notice that one is going to acquire a property, one gets the keys but one does not have to pay until one has worked out the price and that could take two or three years.