Bernard Durkan (Kildare North, Fine Gael)
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Question 84: To ask the Minister for Finance the extent to which a careful appraisal has been done in respect of properties now in the care of the National Asset Management Agency; the degree to which a balance can be achieved in the disposal of such properties with maximum regard for the interests of the taxpayer while at the same time ensuring that the process does not lead to an escalation in property prices which caused the economic collapse in the first instance particularly in the wake of the recapitalisation of the banks; and if he will make a statement on the matter. [10271/12]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by NAMA that as part of the process of acquiring land, development and associated loans from the participating institutions it carried out a rigorous due diligence exercise. This included a legal review of title to the property; an evaluation of the value of the property underpinning the loan and other features of the loan agreement such as the level of income that the loan generated. NAMA assures me therefore that there has been a thorough examination of all the property assets it has acquired and this helps inform its strategy towards the disposal of these assets. NAMA's core commercial objective is to recover for the taxpayer whatever it has paid for the acquired assets in addition to whatever it has invested to enhance property assets underpinning these loans. NAMA will develop strategies to achieve its objectives in the context of the broader purposes of the NAMA Act 2009 taking account of the need to contribute to the social and economic development of the State.

A significant element of the assets acquired by NAMA are outside the State and their disposal will not impact on property prices within the State. As regards the domestic property market, NAMA is in the process of developing a range of strategies for the different types of property which underpin its loans. For example, it is developing a stapled finance product and considering the possibility of Qualified Investment Funds for its commercial property assets and considering other mechanisms to deal with domestic property assets. It is also working to attract international capital into the domestic property market. The Chairman of NAMA has indicated that the loan portfolio will be managed in a structured way by the Agency.

By adopting a multi pronged strategy to deal with the wide variety of assets and given the current weakness of the domestic property market, the likelihood of NAMA contributing to a significant escalation in property prices is minimised. With the steep and ongoing decline in both commercial and residential property prices since 2007, the more immediate challenge facing these markets is to achieve some degree of price stability and an increase in transactional activity and liquidity. NAMA considers that one of its roles over the coming years is to contribute to a renewal of sustainable activity in the Irish market.

Bernard Durkan (Kildare North, Fine Gael)
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Question 85: To ask the Minister for Finance the extent to which it is hoped to dispose of properties held by the National Asset Management Agency in the short, medium and long term given the views expressed during the course of debate on the relevant legislation to the effect that property price inflation over a ten year period would result in a profit for the organisation; if this is likely to happen in view of the overvalued property sector at the time; and if he will make a statement on the matter. [10272/12]

Michael Noonan (Limerick City, Fine Gael)
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In its Business Plan published in July 2010, the Board of NAMA set out its debt repayment schedule. This is set out in the following table:

NAMA ran a number of scenarios which projected the Net Present Value outcome of its activities over its expected lifespan. The baseline Scenario A was based on expected asset recovery values at that time. The results are summarised below:

NAMA in its Annual Statement for 2012, which I recently laid before both Houses of the Oireachtas in accordance with the provisions of Section 53 of the National Asset Management Agency Act 2009, makes clear that asset recovery is not just dependent on sales of property.

This Statement, which is also available on the NAMA website at www.nama.ie , sets out NAMA's objectives for 2012, which are (i) to make further progress towards achieving its overarching objective of the best achievable financial return for the State and (ii) to conduct its commercial activities in co-ordination with the objective of contributing to the economic and social development of the State.

There are a number of strategies that NAMA will pursue to achieve its objectives, of which the main ones are:

* To agree detailed asset sales schedules with debtors

* To optimise NAMA cash flow from loans and debtors

* To adopt an active loan sales strategy

* To attract international investor capital

* To increase market activity in both commercial and residential property markets, through a number of initiatives.

Clearly, the rate of progress in the sales process will be impacted by the demand in the market and the availability of purchasers.

I understand that the NAMA Board is currently reviewing strategy to take account of developments since July 2010 when its Business Plan was published.