Frank Feighan (Roscommon-South Leitrim, Fine Gael)
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Question 6: To ask the Minister for the Environment, Heritage and Local Government if he has been in discussions with Anglo Irish Bank and the Dublin Docklands Development Authority regarding outstanding debt owed by the Dublin Docklands Development Authority; the outcome of any such meetings; and if he will make a statement on the matter. [16045/10]

John Gormley (Dublin South East, Green Party)
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I have had no discussions with the institution in question on matters concerning the Dublin Docklands Development Authority, nor would it be appropriate for me to do so.

The DDDA's annual accounts for 2008 reported a loss on operations of €27 million, reflecting the impairment of the authority's key assets including a significant reduction in the valuation of the Irish Glass Bottle site. In response, the authority's board has cut all discretionary expenditure, is subjecting every cost and overhead to rigorous control and scrutiny, and has put in place a reduced organisation structure.

The authority expects to report a significantly reduced operating deficit for 2009, year on year, and has set an objective to return to a break-even situation as soon as possible. The final position, including regarding borrowings, will be set out in the authority's 2009 accounts which I understand are at an advanced stage of completion.

Arising from the 2008 accounts, the authority submitted a report to my Department in February regarding its participation in the Becbay joint venture which acquired the former Irish Glass Bottle site. I appointed independent financial advisers to assess the report, in consultation with my Department and the Department of Finance. The advisers have submitted their report and I have forwarded it to the authority's board for consideration. I expect to revert to Government on this matter in the coming weeks.

Discussions with the authority's lenders are a matter for the authority itself. I understand that the authority has held preliminary discussions with the National Asset Management Agency in respect of the transfer of loans associated with the Becbay joint venture.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I can be helpful on this because we have discussed the matter already. I have one question. Given that the Dublin Docklands Development Authority has put up its own assets as security for loans from Anglo Irish Bank, in reality that bank will be looking for its money back from every loan it made for obvious reasons. What is the authority's exposure in the event that Anglo Irish Bank comes looking for the money in repayment of the loan? Can the Minister give some indication to the House of how that will be paid back? Ultimately, the Department of the Environment, Heritage and Local Government is responsible for ensuring that the money is paid through the Dublin Docklands Development Authority to Anglo Irish Bank.

John Gormley (Dublin South East, Green Party)
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I will try to be as detailed as I can. In October 2006, the authority sought sanction for borrowings of up to €127 million for the purposes of property acquisition, particularly in connection with the impending acquisition of the IGB site. Consent for this sanction request was sought by my Department to the Department of Finance and was subsequently received on the basis that repayments would be wholly from the authority's own resources without recourse to the Exchequer. The Department of Finance also consented to the authority taking a shareholding in a special-purpose company to facilitate the joint venture development of the site. Neither the Minister for Finance nor I had any direct role in approving or authorising the authority to purchase the IGB, nor did either Minister have any role in approving the final purchase price. As long as the authority operates within its €127 million sanction, it is mandated to make independent commercial decisions, which is an important aspect the Deputy needs to keep in mind. A €288 million loan to Becbay Limited, the consortium developing the former Irish Glass Bottle site, was provided jointly by Anglo Irish Bank and AIB. It is non-recourse loan, largely secured against the land, with the exception of the €111.9 million that is secured by guarantees of three shareholders, Mr. Bernard McNamara, Mr. Derek Quinlan and the authority in proportion to their respective shareholdings.

As I said earlier, as a 26% shareholder in the Becbay joint venture, the authority has guaranteed liabilities of €29.1 million as well as a liability of 26% of interest accruing. The authority considered it necessary to become involved in the purchase of this site because of its key location on the Poolbeg Peninsula, and it has, as the Deputy knows, significant development potential. To be a 26% shareholder in this acquisition was the minimum amount necessary to ensure the authority retained sufficient influence and control over the development.

The figure I saw thrown out in the media of a €500 million cost to the taxpayer - I have seen this in newspapers and it has been quoted by the Deputy at press conferences - is very misleading. To suggest that in some way the Dublin Docklands Development Authority has exposed the Irish taxpayer to the full risk of this venture is not correct. The authority is a 26% shareholder and we need to keep that in mind at all stages.

Joanna Tuffy (Dublin Mid West, Labour)
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With regard to the reports carried out on the Dublin Docklands Development Authority, an issue raised with me today was that money obviously changed hands in the purchase of the sites that are now valued at much less than when they were purchased. Somebody got the money for those sites. Is this one of the issues being investigated? Where did the money go that was handed over for those sites and who holds it now? This is important in terms of accountability.

John Gormley (Dublin South East, Green Party)
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It obviously depends on which site the Deputy is talking about. There have been-----

Joanna Tuffy (Dublin Mid West, Labour)
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I am talking about the vendors, the people who owned and sold the land.

John Gormley (Dublin South East, Green Party)
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If the Deputy is taking about the whole Becbay consortium, I have mentioned the people who are involved, be it Mr. Bernard McNamara or Mr. Derek Quinlan, and prominent names are also involved in the famous Mountbrook case. Some of these people have made a pretty penny but, likewise, some of them are now going through court proceedings, as the Deputy knows, and facing a very tight financial situation. Like many people, they gambled and it did not work out, and there has been a major loss on that site.

With regard to that Becbay site and particularly in regard to the involvement of Mr. McNamara, I have to be careful, as Minister, because that is going through the courts at present.