Róisín Shortall (Dublin North West, Labour)

I thank Deputy Barry for raising this issue tonight. I am responding to this Adjournment matter on behalf of the Minister for Agriculture, Fisheries and Food, Deputy Coveney.

The Minister for Finance does not consider it necessary to establish an agricultural review body within NAMA, although I understand that the agency has agreed to review its procedures where farming assets involving livestock are concerned.

Incidentally, the NAMA board has established four statutory committees under section 32 of the NAMA Act; an audit committee, a credit committee, a finance and operating risk committee and a risk management committee. It has also established two advisory committees under section 33; a planning advisory committee and a Northern Ireland advisory committee.

NAMA has acquired the property loans of about 850 debtors. The loans of the largest 180 debtor connections, accounting for €61 billion of debt, will be managed directly by NAMA. The rest will be managed by the banks under delegated authority. It is expected that nearly all, if not all, debtors who have farming interests or a significant interest in agribusiness will fall into the latter category and will be managed by the banks.

In the particular case which has prompted the Deputy's motion, the loans had been advanced for agricultural purposes and the properly development element was not material. NAMA did not consider it appropriate that it should manage the loans. Section 84(1) of the NAMA Act provides that NAMA is not obliged to acquire each and every loan, even where loans are eligible under the legislation. In this instance, the loans had been acquired under expedited transfer and therefore in advance of due diligence being carried out. When the purpose of the loans became apparent, the NAMA board made a decision to reverse the transfer and the Minister understands that the loans were re-acquired by the bank concerned.

In regard to the suggestion that NAMA is shutting down viable businesses, NAMA has assured the Minister that it is committed to contributing to the objectives of the National Asset Management Agency Act which, among other things, requires it to contribute to the social and economic development of the State, in addition to protecting the interests of the taxpayer by ensuring that the value of any assets securing its loans is not diminished.

Furthermore, as part of the business plan process and ongoing management of the debtor relationship, NAMA is actively engaging with debtors to get their assets to produce income and is approving decisions relating to the underlying security, including lease agreements between the debtor and third parties where it makes commercial sense to do so. There is no reluctance on the part of NAMA to approve commercially viable arrangements.

NAMA has assured the Minister that it is a particular priority for the agency, where it has acquired loans, to minimise the adverse impact on the viability of any business or on the sustainability of any jobs that may be at stake. NAMA fully recognises the importance of ensuring the continued viability of businesses, which can generate cash flow to repay debt and provide sustainable employment.

NAMA has advised that it is currently developing sectoral policies which will govern its strategic approach towards key sub-sectors in its loan portfolio. These policies will be publicised after the completion of the debtor business plan process. In that context, NAMA has advised that it has now reviewed the business plans of the largest 40 debtors whose loans it has acquired and that the business plans of most other large debtors are currently at advanced stages of preparation.

A debtor's business plan essentially consists of individual asset plans for each of his properties. For those debtors who can satisfy NAMA as to their viability, the agency will agree specific asset plans for each of their assets. Those plans may, among other options, involve disposals or completions. In determining a plan for any asset, NAMA will assess the supply and demand for similar assets in the same area or region. In particular, the agency will also be very mindful of whatever planning policies have been set by the local authority in each instance.

NAMA will not normally directly manage the loans of debtors who have farming interests or a significant interest in agri-business nor will it seek to shut down viable businesses. Under these circumstances, the Minister does not consider it necessary to establish an agricultural review body within the National Asset Management Agency. NAMA has, however, agreed to conduct a review of its procedures where farming assets involving livestock are concerned. I thank the Deputy for raising this matter.

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