Barry Cowen (Laois-Offaly, Fianna Fail) | Oireachtas source

As we all know, the collapse of the building industry and the banking crisis left many unfinished housing developments through the country. The importance of the placement of appropriate insurance or financial bonds with various local authorities became very obvious.

In such circumstances the bond can be claimed by the local authority and arrangements put in place for remaining outstanding works and services to be completed by that local authority. In most cases this ensures that roads, lighting, footpaths, water management and so forth are done in accordance with the building regulations and the initial planning permission granted for that development.

Last Monday, some members of Kerry County Council were briefed on the progress being made by that local authority on unfinished estates. They were informed that eight bonds had been placed with IBRC. Two had been claimed successfully prior to the recent and sudden liquidation of the bank. The other six now appear to be useless, placed on the list of creditors. I raised a similar situation some weeks ago relating to an estate in Arklow. In that instance, homeowners had been asked by the council to foot the bill in the absence of such a bond. I asked then that the Department of the Environment, Community and Local Government contact Wicklow County Council, take ownership of the issue and show leadership on it. Subsequently, I discovered that the bond in question is now being pursued through the courts, and rightly so. However, that policy indicates that in the absence of an adequate bond, homeowners may be pursued.

The dramatic liquidation of IBRC has had a number of consequences the Government does not appear to have anticipated and planned for effectively. A number of credit unions, for example, had fixed term deposits with the former State-owned bank which might also be lost in the liquidation. Sources within the credit union movement have stated that losses could be as high as €17 million for credit unions across the country. I do not want this burning of credit unions and local authorities to be remembered as the only burning of bondholders that took place. That is the reason I raise this.

Rather than me consulting with each local authority throughout the country, does the Minister know how many local authorities have bonds lodged with IBRC? How much money, potentially, will be lost to the local authorities? Did the Government consider the impact of the liquidation on local authorities and credit unions? What steps is the Minister taking to address this situation before it turns into a crisis that cannot be reversed?

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