Friday 27 November 2009

DDDA confirms €27m loss

The Dublin Docklands Development Authority (DDDA) has today confirmed that it recorded an operating loss of €27 million last year.

Describing 2008 as “an exceptionally difficult year”, chairman of the DDDA Prof Niamh Brennan said the collapse of the property market posed huge problems for the agency and it would need financial support from the Government.

On an operating basis before impairments, the authority reported a €27 million deficit last year, compared to a €3 million surplus for 2007.

The DDDA said it faced impairments, losses and other writedowns on its various property asset of €186 million at the end of 2008.

The writedowns include the authority’s 26 per cent interest in the Glass Bottle site in Ringsend, bought three years ago at the height of the boom by a consortium that included the authority, Bernard McNamara and Derek Quinlan, for €412 million.

Combining operating loss and impairment losses, the DDDA ended 2008 with a deficit in its consolidated income and expenditure account of €213 million as against a surplus of €3.7 million a year earlier.

In addition, the agency had net assets in its own single entity balance sheet of €26 million by the end of 2008 compared to net asses of €177 million in 2007.

Speaking yesterday, Taoiseach Brian Cowen declined to be drawn on the question of whether the State will have to rescue the agency.

Prof Brennan, who took over as chairman of the agency in March after the resignation of Paul Maloney as chief executive, admitted public confidence had been seriously undermined in recent months. However, she added the authority had made "significant progress" in addressing its financial problems and estimated that the deficit for this year would be "substantially lower" than in 2008.

Prof Brennan said the authority had taken “an exceptionally aggressive” approach to write downs on property assets in 2008.

“The board was of the view that there was no point in waiting to deliver more bad news on this front in six or twelve months time and took a very aggressive approach to writedowns in 2008 so that the Authority will not be effected by such levels of impairment in future years,” she said.

She said the authority had to take "a radically different approach" to restoring the agency's finances and to completing outstanding projects.

Responding to the loss, Fine Gael environment spokesman Phil Hogan said there were now "serious concerns" the Government would bail out the DDDA "and that those responsible for the massive losses will get away scot-free".

"The Dublin Docklands Development Authority was hijacked by developers and Anglo-Irish executives, and it is these individuals that should meet the burden of the losses, not the taxpayer," he said.

"The Minister for the Environment had to sign off on the borrowing requirements and, therefore, he must have known of the perilous state of its finances since he came into office," Mr Hogan said.

He said a conflict of interest still remained with the DDDA as a planning authority getting involved in a joint venture with private developers "to purchase grossly over-valued sites with the promise of quick planning permission"

Mr Hogan expressed the hope the new DDDA chairperson would tackle the issues raised.

Labour spokeswoman Joanna Tuffy said the docklands deficit was a "shocking indictment" of the management of the authority over recent years and pointed to a "serious failure" of political supervision.

She said "reckless decisions" by the board had brought the DDDA close to bankruptcy and left the taxpayer facing a financial black-hole.

"Minister Gormley has been in office for two-and-half years yet seems to have done nothing to stop the rot in the DDDA."

Irish Times

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