THE DUBLIN Docklands Development Authority said yesterday it would require financial assistance from the State as a result of its purchase of the Irish Glass Bottle site.
The DDDA confirmed it made an operating loss of €27 million last year and faced impairments, losses and writedowns on its property assets totalling €186 million.
The DDDA, set up to regenerate Dublin’s docklands area, ended 2008 with a deficit in its consolidated income and expenditure account of €213 million.
This includes its share of the liability of Becbay Ltd, the company that bought the Irish Glass Bottle site for €400 million at the peak of the property market in January 2007.
Prof Niamh Brennan, appointed chairwoman of the DDDA earlier this year, said the collapse of the property market during 2008 and a plunge in the value of the authority’s assets meant it had been an “exceptionally difficult year”.
Apart from the €27 million operating deficit, the DDDA recorded net liabilities in its consolidated balance sheet, which includes the Becbay liability, of €48.5 million.
Prof Brennan said the authority’s operating losses had continued into 2009. “The authority is currently running a deficit, although the deficit for 2009 would be less than 2008. We believe we can break even. That won’t happen overnight, but the board believes it is an attainable goal,” she said.
Prof Brennan said the significant expense of the Irish Glass Bottle site transaction meant the DDDA would need financial assistance from the State. This could be in the region of €35 million.
Development projects planned by the authority will now be either shelved or cancelled, she said.
“Obviously we have limited means and we have to target our resources in the most effective way. We are trying to focus our resources on the social regeneration work of the authority,” Prof Brennan said. These projects will continue to go ahead, she added.
The DDDA’s social regeneration remit includes a number of education projects such as the funding of local schools and sponsorship of third-level places.
The DDDA’s development projects also include the building of the U2 Tower at Britain Quay. The authority said in October 2008 that this project was on hold for at least a year until market conditions improved.
Prof Brennan said yesterday the DDDA would implement a “new business model . . . which will result in a more conservative approach”.
A High Court ruling against the authority in 2008 in respect of the use of its planning powers would have a “profound impact” on how it conducted its business, she said.
Earlier this month, developer Bernard McNamara began legal action against the DDDA in relation to the Irish Glass Bottle transaction.
Mr McNamara and developer Derek Quinlan were the other stakeholders in Becbay.
Mr McNamara claims that, because of the High Court finding last year that the DDDA acted outside its powers in fast-tracking permission for another docklands development at North Wall Quay, the DDDA was never entitled to enter in November 2006 into an agreement to develop the Irish Glass Bottle site.
Irish Times
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