Sunday 25 May 2008

McNamara: 'I don't owe €1.5 billion'

MULTIMILLIONAIRE developer Bernard McNamara has mounted an all-out defence of his property empire over questions about his decision to pull the plug on his joint venture projects with the State in Dublin's inner city.

The Clare-born entrepreneur found himself dragged unwittingly into the spotlight with the announcement that his firm, McNamara & Co, was pulling out of five separate Public Private Partnership (PPP) projects to redevelop local authority estates in Dublin's inner city.

The multimillionaire builder and developer, who has come to symbolise the Irish property boom, cited tighter building regulations and requirements for larger apartment sizes as making the projects unviable.

But the decision -- and its timing -- has ignited controversy in property, financial and political circles.

Estimates in excess of €1.5bn in borrowings attributed to the high-flying property magnate's development portfolio were roundly rejected by sources close to Mr McNamara, as the developer battled to bring an end to a week of controversy.

News that McNamara had also put landmark assets up for sale while property prices are in free fall fuelled the controversy further.

Contacted by the Sunday Independent for comment, he said: "There's a lot I could say, but I'll say nothing ... ours is a private business and what we do is private."

But while the media-shy developer was remaining tight-lipped on the week's

events, others close to Mr McNamara moved in to defend the integrity of his property empire.

Speaking to the Sunday Independent, a highly-placed source insisted there was no threat to the well-connected businessman from his massive property borrowings now, or into the future.

Asked to comment on McNamara's estimated borrowings of €1.5bn, a source close to the builder dismissed the figure. "The borrowings are significantly lower than that," he said, adding that Mr McNamara has a long-standing and substantial property portfolio from which he was earning significant rental income from the State.

The same source also pointed to the decision last Friday by Dublin City Council to grant planning permission for the redevelopment of the Burlington Hotel site, which it is speculated will be worth €1bn when completed in eight years' time.

Meanwhile, plans by the developer to break ground on the Burlington project in the spring of 2009 could face challenges which include the ongoing slowdown in the domestic economy.

In a clear illustration of the impact of the slump in construction, Ireland is now being abandoned as the destination of choice for Eastern European migrant workers, many of whom are now seeking their fortune elsewhere.

The number of migrant workers coming to Ireland has halved in the past 12 months and almost one third of those who have come since 2004 have left, new figures obtained by the Sunday Independent reveal. While the number of migrants in Ireland rose from 140,000 in 2004 to over 420,000 today, since the property slump took hold there has been a sharp reduction in the number of migrants from such Eastern European countries as Poland, Lithuania and Slovakia.

According to Integration Minister Conor Lenihan, numbers seeking work this year are set to halve, falling to between 32,500 and 35,000. Another key tracker of migrant workers shows that roughly one third of the migrants who came here since 2004 are no longer here.

By examining the PPS numbers of workers and the activity on those numbers in terms of income being paid and levels of taxation on that income, the Government can estimate the movement of those migrant workers. Of the PPS numbers created since 2004 for migrant workers, between 30 and 35 per cent of these are now 'inactive'. The most likely explanation for this, according to Minister Lenihan, is that these migrants have left the country.

While Ireland's slowdown has provided the trigger for the collapse in migrant numbers, two other key factors are also playing their part. London has become highly attractive to low-skilled manual labourers as a building boom takes hold ahead of the 2012 Olympics. Also Poland is experiencing an economic boom and is set to see growth of over 5.5 per cent this year -- unlike Ireland, which is stagnating. The Polish government has also embarked on a drive to encourage its citizens based in Ireland to return home to address its growing labour needs.

Irish Independent

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