Pearse Doherty (Donegal South West, Sinn Fein)
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Question 71: To ask the Minister for Finance if it is possible for a loan to go into the National Asset Management Agency at half the value, the developer then to sell the asset at a higher figure, pay NAMA the discounted amount and pocket the balance; and if he will make a statement on the matter. [10061/12]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by NAMA that the scenario outlined by the Deputy is not part of any arrangement that the Agency has approved, or would approve, with a debtor. A debtor must receive NAMA's approval to the proposed sale price of any asset that has been targeted for disposal. It also requires debtors to conduct sales using a competitive sales process aimed at maximising the price achieved on the sale. The process and the resultant flow of funds is closely monitored by NAMA. The proceeds of such sales are directly applied to reducing the debtor's outstanding indebtedness.

I am informed by NAMA that where debtors fully co-operate with NAMA it is considering, in some cases, the introduction of incentivisation arrangements which are intended to achieve the best result for NAMA. I understand from NAMA that these arrangements are still being developed by the agency. However it is possible that where a debtor achieved a key financial milestone, such as the payment of all NAMA's loan acquisition costs plus 10 per cent, it could be possible to put an incentive arrangement in place to enable him to retain a small percentage of every euro achieved above that financial milestone.

If a debtor is not incentivised to achieve a return in excess of a minimum target set by NAMA, the agency believes it will get very little over and above that target. The objective of the incentive is to get the debtor working not so much for himself but for the taxpayer and NAMA.