Brian Lenihan Jnr (Dublin West, Fianna Fail)

That was the issue Senator O'Toole raised. I am grateful to him for raising this interesting question about the provision.

The Labour Party's amendment provides for making appropriate assets available for public, community or social use, either free or at a non-commercial cost, or transferring assets to appropriate statutory agencies to facilitate such use. Senator Mullen's amendment is somewhat narrower in that it provides for facilitating specified service providers in the fields of the provision of emergency housing, transitional housing and related areas and having preferential purchasing rights in the purchasing of such housing units, particularly where there are housing problems as defined by the local authorities.

I agree with these worthy sentiments. They are policies which we hope to implement in the context of the operation of NAMA. The section in which Senator Mullen wishes to insert his amendment, however, states the purposes of NAMA are to acquire bank assets, deal expeditiously with them and to protect or otherwise enhance the value of the assets. NAMA has a commercial mandate. While that does not mean it cannot have a social mandate, the bulk of the debate about its purpose has been devoted to how essential it is that it breaks even or makes a profit. If we were simply to give land away for nothing - as proposed in Senator White's amendment - clearly that commercial mandate would be entirely cancelled out. That would not be appropriate because, if we were to accept the Labour Party amendment to section 12, we would be disposing of assets for nothing in a way that would not be expressed on the balance sheet. Clearly, the agency should not be empowered by the Oireachtas to do this.

Senator Mullen formulated his amendment in a narrower format, as he said the area of preferential purchasing rights should be accorded. The interim chief executive has met a number of agencies involved in connection with the provision of emergency accommodation and it will be the policy of the agency to engage with such bodies and provide for preferential access. I intend to direct NAMA to give State agencies the first opportunity to purchase certain assets where this is important to social developments within their remits. There has been a difficulty with the acquisition of school sites, playground sites and sites for community developments where the developers have effectively ransomed the community in respect of the purchase price. In the context of the social and economic development of the State, NAMA can give a first option on the acquisition of a particular site to the appropriate authority, be it a local authority, school authority or health authority. Far from being opposed to this idea, I support it. However, we should not mix it up with the statutory purposes of the agency.

It seems the correct way to deal with this matter is by way of ministerial direction. The powers of ministerial direction are very explicit on the issue. The compelling needs identified for the establishment of NAMA include the need to contribute to the social and economic development of the State, as set out in section 2. In sections 13 and 14 the Minister is given the power to issue guidelines on these matters. Section 13(2) and section 14(2) both provide that, without prejudice to the general power of the Minister to issue guidelines, he or she may issue guidelines that relate to the purposes of the social and economic development of the State. The ministerial power to issue guidelines in the Bill enables the securing of what Senator Mullen wishes to secure with his amendment. The Minister is in a position to issue guidelines and give a direction. I am not sure whether the issue was explored on Committee Stage, but there is a distinction made in the Bill between guidelines and a direction. Guidelines are abstract in character and clearly would cover all developments. One of the difficulties with them is that they would inhibit NAMA's capacity to realise commercial gain when disposing of property. Let us say NAMA had a good buyer and I had issued guidelines which obliged the agency to offer every item of property as a first option to the local authority. That would be a very inflexible arrangement. On the other hand, the guidelines I intend to draw up may deal with cases where there are certain essential community facilities, be they health centres, community centres or schools. In my own county schools are being built with community centres, which is a marvellous initiative. All of this can be done under the Bill, but we must be clear on what we are doing. We are giving people first refusal, but they still have to pay------