Michael Healy-Rae (Kerry South, Independent)
Link to this: Individually | In context

Question 187: To ask the Minister for Finance if he will provide a breakdown of the payment paid to developers through the National Assets Management Agency on behalf of the State; and if he will make a statement on the matter. [27790/12]

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

I am advised by NAMA that it is the Agency's practice to allow debtor companies to retain overhead costs from rental or other income that are produced by their assets where this is necessary for the operations of the debtor companies. The level of overhead is only agreed following a thorough and rigorous evaluation of the debtor's business plan by NAMA. Each cost element is reduced to the minimum and the level of overhead sanctioned by NAMA typically represents a very significant reduction on the level which prevailed prior to NAMA acquisition of the loans: typically, reductions of 50% to 75% in overhead costs have been imposed by NAMA. I am advised by NAMA that overhead costs fall into two broad categories:

1. Costs associated with the repair and maintenance of properties, insurance premia, local authority rates and professional fees. These are essential costs which would be incurred regardless of whether the assets were being managed by debtors or receivers.

2. Overhead costs also include an allowance for the debtor's salary and the salaries of staff employed by the debtor to manage the assets. The alternative in these cases is to appoint receivers and I am informed by NAMA that receiver costs tend to be substantially higher than debtor and associated staff salary costs.

NAMA has collated data on overhead costs for 2010 relating to 41 debtors who managed a total par debt of €18.6 billion or 25% of the total NAMA portfolio. Approved overheads for the 41 debtors was €55 million. This represents less than 0.3% of the par debt involved. Of the €55 million in overhead costs, I am informed by NAMA that the bulk of the costs related to essential costs associated with maintaining and preserving the assets and only €4.1m relates to remuneration. NAMA is currently collating data on all debtor overhead costs and intends to publish this analysis at a later stage.