Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

3. To ask the Minister for Finance the par value of the remaining loan assets on the books of NAMA; if he will outline NAMA's strategy for the disposal of same and provide an update on planned portfolio sales; his plans to strengthen the existing oversight mechanisms for future loan sale transactions or introduce new mechanisms in view of the Comptroller and Auditor General's report on the sale of Project Eagle; and if he will make a statement on the matter. [27796/16]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

This question is on the same topic. It is welcome that the Minister has agreed to appear before the Committee of Public Accounts. This is the right decision. The central purpose of my question is to establish whether the Minister wishes to strengthen oversight mechanisms and put new safeguards in place for future NAMA disposals because we are dealing with an extremely serious issue. The Government has agreed to set up a commission of investigation. By admission, that means that there is an issue of significant public concern. This is a very serious issue. NAMA is still sitting on a lot of assets and we need to be reassured that the process in which it will engage for any remaining sale will be safe, have integrity and fully protect the interests of taxpayers.

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As per NAMA's most recent section 55 quarter 1 report which is available on its website, the par value of its outstanding loans was €39.6 billion at the end of March. I am advised by it that its section 55 quarter 2 report will be finalised shortly and disclose the par value of its outstanding loans at the end of June. I am further advised that its disposal strategy is, as previously outlined, designed to take full advantage of strong purchaser interest in loans and property assets securing its loans. NAMA utilises a range of disposal mechanisms, including loan sales, portfolio sales and individual asset sales, to take maximum advantage of purchaser interest and ensure the greatest possible return to the State. Its successful sales strategy which has been predicated on releasing loans and assets for sale in accordance with the level of demand and absorption capacity in each of its main markets - for example, in the period up to 2013, NAMA concentrated sales activity in Great Britain, primarily London, and has since moved to take advantage of the strong recovery in Irish demand - means that it is on track to repay all of its senior debt by 2018.

As regards accountability, I remind the House that NAMA is already subject to a high level of public accountability compared to other commercial bodies, including commercial bodies in the State sector. Its accounts are comprehensively audited by the Comptroller and Auditor General. It is within the power of the Comptroller and Auditor General to scrutinise any aspect of its work, as most recently seen in the report on Project Eagle referenced by the Deputy. The Deputy will note that the Comptroller and Auditor General did not recommend increasing NAMA's accountability in his report. The value for money report was effectively an accelerated module of the Comptroller and Auditor General's normal section 226 review of NAMA required under the National Asset Management Agency Act.

As already provided for in the NAMA Act, in 2015 the Comptroller and Auditor General committed to reviewing a broad sample of NAMA's sales and investment decisions as the focus of its next section 226 report.

The chairman and chief executive are also accountable to the Committee of Public Accounts and other committees, and give evidence to those committees whenever required to do so. Indeed, NAMA is appearing at the Committee of Public Accounts today to discuss the Comptroller and Auditor General's value-for-money report.

I, as Minister for Finance, also have specific powers to review and assess NAMA's activities under section 227 of the NAMA Act.

Additional information not given on the floor of the House.

The last section 227 review supported the implementation of the NAMA board's current disposal strategy.

In addition to the above, the board of NAMA must comply with its obligations under the NAMA Act. Section 18 of the NAMA Act sets out the principal responsibilities of the board, which are to ensure that NAMA discharges its functions efficiently and effectively, to set strategic objectives and targets for NAMA, to ensure that the appropriate systems and procedures are in place to achieve the strategic targets and objectives and to take all reasonable steps available to it to achieve those targets and objectives. The board has established four statutory committees, under section 32 of the Act, to assist in the discharge of its responsibilities and obligations: audit committee, credit committee, finance and operating committee and risk management committee.

NAMA's annual reports, quarterly reports and annual statements are all laid before the Houses of the Oireachtas. The level of disclosure in NAMA's reports is comprehensive and professional. Any recommendations resulting from the Committee of Public Account's review of the Comptroller and Auditor General's value-for-money report will be considered in due course. However, in light of the high level of accountability to which NAMA is currently held it is not currently appropriate to contemplate any additional oversight measures not already provided for in the NAMA Act.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Minister for his reply. The key issue is that there is a major cloud hanging over the Project Eagle sale, which totals £1.3 billion. The Government has conceded the need for a commission of investigation, which only happens where an issue of significant public concern has to be investigated. The Comptroller and Auditor General has told the Committee of Public Accounts today that Project Eagle was not a satisfactory sales process.

The Minister has told the House that NAMA has up to €40 billion par value of loans that remain to be sold. How can he reassure the House and, more importantly, the Irish people that any further disposals by NAMA will meet the requirement for the public interest to be at the forefront, that taxpayers' interests are fully protected, that any further sales processes will achieve that objective and that the integrity of those processes is protected? That is what I need to know. How can the Minister reassure us, given that a major cloud hangs over Project Eagle and how it was handled? Massive sales still have to go through the system.

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There are strong accountability requirements under the NAMA Act, and they have been implemented since the Act became law. The activities of NAMA are reviewed as I described, that is, in accordance with the Act.

The Committee of Public Accounts is reviewing the value-for-money report produced by the Comptroller and Auditor General into Project Eagle. In the normal process of the committee's work, its inquiries will be followed by a report and that report will have recommendations. If the committee decides that accountability has to be increased, I am sure that will be reflected in its recommendations.

I envisage a similar process will be followed if there is a commission of inquiry. One investigates first, then one draws conclusions and makes recommendations. If the recommendations require additional accountability, of course I will be amenable to accepting them.

When one compares NAMA to any other commercial State agency, it has a higher level of accountability. Every Deputy knows that the Comptroller and Auditor General has staff embedded in NAMA who work in it for perhaps ten months of the year. They have access to all paperwork and transactions.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I accept that it is in the national interest that there be a smooth work out of the remainder of NAMA's assets. I understand the issues around senior debt, contingent liability and all of that. However, we have to be reassured about the integrity of the sales process. Accountability instruments are already built into the system, but they, in the form of the report of the Controller and Auditor General, have identified serious issues which have led to the establishment of a commission of investigation.

I welcome what the Minister appears to be saying, that is, if the Committee of Public Accounts recommends additional oversight mechanisms for the strengthening of accountability provisions then he would be prepared to implement them. I ask him to clarify that is what he is saying, namely, that if the Committee of Public Accounts report seeks additional changes, whether by way of legislation or strengthening the accountability and oversight mechanisms regarding NAMA, that he is prepared to implement that.

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If the committee makes recommendations on strengthening accountability and if, in the opinion of the Government, they are fit-for-purpose of course we will implement them. I do not want to give a commitment, sight unseen, on possible recommendations, the content of which I do not know. In principle, I agree with the Deputy.