Michael McGrath (Cork South Central, Fianna Fail)
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Question 179: To ask the Minister for Finance if he will provide full details, including a breakdown by unit with the agency, of professional and consultancy fees incurred by the National Treasury Management Agency for each of the years 2008, 2009, 2010 and to date in 2011; and if he will make a statement on the matter. [18866/11]

Michael Noonan (Limerick City, Fine Gael)
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Professional, legal and consultancy fees incurred each year by the National Treasury Management Agency, the National Pensions Reserve Fund Commission and the National Asset Management Agency are published in the Annual Reports of each body. Fees and expenses incurred by the National Development Finance Agency in the performing of its financing and advisory functions in relation to specific public investment projects are reimbursed by the relevant State Authority.

National Treasury Management Agency

*€2.9m of the banking costs incurred in 2010 are recoverable from the covered credit institutions .

The banking costs incurred in 2008 relate to fees paid to Merrill Lynch following a request from the Minister for Finance to engage advisers to provide advice on structural issues in financial markets.

The banking costs incurred in 2009 relate to a further €4.9 million payment to Merrill Lynch and a €0.7 million payment to Rothschild in respect of the provision of banking advisory services to the Minister for Finance acting through the NTMA.

The NAMA-related expenses incurred in 2009 relate to legal and consultancy expenses associated with the establishment of NAMA.

€6.2 million of the banking costs incurred in 2010 relate to further payments to Rothschild in respect of the provision of banking advisory services to the Minister for Finance acting through the NTMA.

Banking fees discharged to date in 2011 include costs associated with achieving burden-sharing with holders of subordinated debt.

National Pensions Reserve Fund

*Legal and tax fees relate primarily to the costs of due diligence on alternative asset investments.

The fees and expenses incurred by the NPRF Commission are charged to the National Pensions Reserve Fund.

The directed investment costs incurred in 2009 relate to the due diligence exercise which the Commission had conducted on Bank of Ireland and Allied Irish Banks at the request of the Minister for Finance prior to the €3.5 billion investment in each of these institutions by the Fund at the direction of the Minister. The Fund received €30 million in arrangement fees in respect of each of these transactions.

The directed investment costs incurred in 2010 relate to legal advice in respect of Bank of Ireland's capital raising and other ongoing legal advice in respect of the directed investments.

National Asset Management Agency (NAMA)

Legal and consultancy fees incurred in 2009 in setting up NAMA are included with the information on the NTMA above.

The fees and expenses incurred by NAMA are not borne by the Exchequer but are recovered through the operating activities of the agency. NAMA fees and expenses are published in NAMA's quarterly reports to the Minister for Finance.

The financial advisor and consultancy fees incurred in 2010 include fees paid for accounting, financial and business process advice over the period from the incorporation of NAMA to the end of 2010. NAMA seconded staff from external consultancy firms and financial advisers to assist in the initial set-up of business units (until NAMA officers were recruited by the NTMA) and the development and implementation of processes and policies.

The portfolio management fees incurred in 2010 relate to the review of debtor business plans.

The legal and tax costs incurred in 2010 relate to fees paid to professional service firms in respect of legal and tax advice and the secondment of staff for legal due diligence.

It is expected that the level of professional and consultancy costs in future will not be as significant as the costs incurred during 2010 which include costs associated with the establishment of NAMA, particularly relating to the secondment of staff prior to the recruitment of NAMA's own staff.

In addition to the above figures, NAMA incurs due diligence costs as part of the process of acquiring loans and related derivatives from the Participating Institutions (PIs). These costs include legal, valuation and property due diligence fees together with the fees of the audit co-ordinator. NAMA incurred due diligence costs of €29.6 million in 2010 and €9.0 million for the first quarter of 2011. However, NAMA factored these costs into the acquisition price of the assets so that they were recovered from the PIs in the form of a reduced payment for the assets.