John Gormley (Dublin South East, Green Party)

The Deputy should always check against delivery. The committee should be commended on its questioning, which is extremely important. I will elaborate on that later.

Any useful discussion of the performance of the authority has to benchmark what it has achieved when compared to the role assigned to it by its founding legislation. The authority was established in 1997 to secure the social and economic regeneration of the docklands area. In general terms, the authority is a commercial semi-State body, financed entirely from its own resources, which are generated through the acquisition, development and sale of property in the docklands area.

Since 1997, the authority has delivered substantially on its statutory duty to regenerate the Dublin docklands area. Over the past ten years, it has completed a wide range of projects and initiatives addressing education, employment, community development and housing. The area has been transformed into a vibrant, sustainable and integrated community at the heart of our capital city. The docklands project is valued not just nationally but is recognised as one of only a small number of best practice models for inner-city regeneration across Europe and beyond.

Nobody can dispute the physical transformation that has taken place in docklands. Projects such as the IFSC, the O2, Grand Canal Square, the Liebskind Theatre, the National Conference Centre and the Sean O'Casey and Samuel Beckett bridges all demonstrate the scale and quality of the transformation in the docklands. Today we see the opening of the Luas extension through the docklands from Connolly Station to the O2. That is a remarkable achievement in a short space of time.

Since its inception in 1997, the authority has generally been self-financing and has maintained a healthy financial position while undertaking new property acquisitions and investing in and facilitating key infrastructure in the docklands. Over the past year or two, however, the collapse in international financial and property markets has created serious financial challenges for the authority. The resulting impairment in the value of its property interests and the slowdown in commercial activity have had very serious consequences for the authority's financial standing. The year 2008 saw accumulated losses of €213 million for the year, including a loss on operations of €27 million, and very significant write-downs on its property assets, including its investment in the Irish Glass Bottle site in Ringsend.

These impairment losses are based on valuations of the authority's property portfolio. The authority acknowledges that these valuations are extremely prudent and are based on the extreme market realities that prevail at present, accepted as being the most difficult trading environment for many years. The net result of these devaluations has been a reduction in the authority's own net assets from €177 million in 2007 to €26 million in 2008.

I understand that the chair of the authority outlined to the Oireachtas committee last Tuesday how the authority has responded aggressively and urgently to its financial position. Measures include all overheads being carefully monitored and reduced where possible; discretionary spending being cut significantly; and staff numbers being reduced significantly as fixed-term contracts expire. The authority's operating deficit has already narrowed significantly during the current year and the chair expects the deficit will be reduced from its 2008 level of €27 million to less than €10 million by the end of 2009. This process of recovery is expected to continue next year and the authority is aiming to return to a break-even position in 2011 on its operating costs.

The political and public concern regarding the financial position of the authority, as well as concerns about its property investments and standards of corporate governance, are understandable. I am very concerned about the decisions it took in recent years which left it exposed financially and cast a cloud over its reputation. The authority took its eye off its fundamental objective, the social regeneration of the docklands area.

Much excellent work has been done in this area over the past ten years. More than 3,000 new residential units have been approved, including over 800 social and affordable housing units. Almost €16 million has been spent on social regeneration. The authority's education programmes in the docklands have been an outstanding success. The percentage of docklanders leaving school before the age of 12 has fallen from 35% to 13%; those leaving before age 15 have fallen from 65% to 30%; the numbers of locals sitting the leaving certificate have risen from 10% to 60%; and those participating in third-level education has risen from 1% to 10%. The future focus of the authority, while not losing sight of its economic role, must be on its key regeneration functions.

The work of the DDDA can only continue if it adopts an open and transparent approach to how it conducts its business. It must restore the confidence of its key stakeholders - the local communities in the docklands, those who work there and the public. My appointment of Professor Niamh Brennan as chairman of the authority in March this year was aimed at bringing her reputation and expertise in corporate governance to bear in setting the authority on the right path again. I am grateful to her for her leadership of the organisation in the most difficult period in its short history.

Deputy Hogan raised concerns about corporate governance in the authority and he pursued this matter vigorously at a meeting of the Oireachtas joint committee last week. The Deputy is correct to pose these questions. Professor Brennan dealt openly last week with what she termed the "systematic conflict of interest which occurred at the docklands authority in the middle years of this decade". I requested her some time back to undertake a comprehensive review of corporate governance within the authority and two reports examining its finance operations and its planning functions were subsequently commissioned by the authority. Professor Brennan indicated to the committee last week that the reports will be to the same exacting standards as any similar report undertaken by the Comptroller and Auditor General. The reports will leave no stone unturned. I am anxious to get to the truth and I hope we can do that. I agree with the chairman's statement to the committee last week. I expect both reports to be finalised shortly. Once I have received and considered them, I will quickly consult the Government on the necessary set of responses.

Even at this stage, the authority has implemented several procedural changes aimed at improving corporate governance. These include reducing the expenditure limit requiring board approval; preparation of a central procedures manual for the authority; the introduction of more formal strategic and corporate planning processes on an annual basis by the end of 2009, as required by the revised code of practice for State bodies - this will supplement the authority's master plan, which is required under its parent Act and which was updated in 2008; a review by the internal auditors of the authority's risk management framework, with areas of weakness remedied; and revised procedures for the section 25 fast-track planning powers, including in regard to public consultation. The authority is also considering other measures to improve reporting arrangements with my Department.

Under the 1997 Act, the Oireachtas has entrusted my office and the office of the Minister for Finance with the task of ensuring that the DDDA operates in accordance with its statutory mandate. The principal legislation governing the functions of the Comptroller and Auditor General is the 1993 Comptroller and Auditor General (Amendment) Act. This Act details the accounts audited by the Comptroller and Auditor General. The main such accounts are the Appropriation Accounts of Departments and Government offices; the finance accounts; the accounts of revenue collections; and the accounts of the non-commercial semi-State bodies listed in Schedule 1 of the Act. As a general rule, the legislation establishing non-commercial State bodies specifies that the Comptroller and Auditor General should audit the accounts of these bodies. Commercial State bodies, on the other hand, are generally audited by private commercial auditors rather than by the Comptroller and Auditor General. This reflects the independent commercial role of these bodies and also the fact that, in general, these bodies are funded by their own resources and borrowings rather than by grants from the Exchequer.

The Comptroller and Auditor General (Amendment) Act 1993 specifically prohibits the Comptroller and Auditor General from exercising his role in regard to the commercial State bodies listed in Schedule 2 of the Act, which includes the Custom House Docks Development Authority, the DDDA's predecessor. The Chairman of the Committee of Public Accounts, Deputy Bernard Allen, wrote to my Department as well as to the Minister of Finance in June this year, requesting that the authority be brought within the remit of the Comptroller and Auditor General. This request followed a previous request from the Oireachtas joint committee to the Comptroller and Auditor General in May, asking him to examine and prepare a report on the authority's annual report and accounts for the past five years. The Comptroller and Auditor General's response stated the authority did not fall within its remit, as the DDDA Act specifically provided that the authority can appoint its own auditors, subject to the approval of the Ministers for the Environment, Heritage and Local Government and Finance, and his power of inspection only applies to bodies that receive at least 50% of their funds from the Exchequer.

Having considered the matter, I replied to the Chairman of the Committee of Public Accounts in September, pointing out the current arrangements whereby I am required, with the consent of the Minister for Finance, under section 43 of the DDDA Act to approve the appointment of independent auditors to sign off on the authority's annual accounts and that I did not intend to change the existing arrangements. Under these arrangements, it is open to the joint committee to have staff of the authority appear before it, thereby affording the Oireachtas an opportunity to question them on the authority's accounts and activities. This facility has been availed of twice in the past year, with representatives of the DDDA appearing before the committee in February and again last week. I am not opposed to the idea of a more formal role for the Comptroller and Auditor General, in principle, and I will keep the need for future involvement on the part of the Comptroller and Auditor General under review. However, a role for the Comptroller and Auditor General needs to be considered as part of an overall strategic response to the corporate governance reviews, which are nearing finalisation.

The authority has been instrumental in transforming the docklands and improving the lives and aspirations of docklanders. Despite its financial difficulties during 2008, the authority continued to progress most of its social development, leisure, tourism and culture initiatives. The imminent completion of the convention centre, the Grand Canal theatre, the Samuel Beckett bridge and the Luas to the Point village will bring more positive news to the docklands area in the near future. The recent completion and opening of the O2 arena has given the area a welcome lift. Apart from being a top class entertainment venue, the O2 will provide more than 600 jobs during its 150 to 200 annual events. Considerable progress has been made on Dublin's convention centre at the Spencer Dock. This world class centre, which is due to open in next September includes a 2,000 seat auditorium and will extend to more than 440,000 sq m. Following the completion of the centre, Dublin will be in a position to compete in the international convention market. The unique and distinctive Samuel Beckett bridge, which will link Macken Street on the south side with Guild Street on the north side, will open this week. Work on the Luas red line extension from Connolly Station to the O2 is complete and trams began operations today.

While restructuring is necessary for the authority to refocus on delivery of short-term key goals in a difficult operating environment, it also aims to maintain a core skills base within the organisation to ensure that the authority is well positioned to take advantage of future opportunities. The DDDA has brought significant benefits to the Dublin docklands. It has ground to make up in repairing its finances and its reputation. I look forward to receiving the corporate governance reports from the chairman and I will act decisively in response to them.

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