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Dáil Éireann debate -
Tuesday, 3 Dec 1991

Vol. 413 No. 9

Ceisteanna—Questions. Oral Answers (Resumed). - Purchase of Carysfort College.

Jim Higgins

Question:

11 Mr. J. Higgins asked the Minister for Education if he has responded to the query from the Comptroller and Auditor General in his 1990 report as to whether his Department sought to reconcile the Valuation Office open market value of Carysfort College and property of £3.8 million in August 1989 with the price at which it was agreed that University College Dublin acquired the property at £8 million in November 1990; if he will outline the content of that reply; and if he will make a statement on the matter.

Eamon Gilmore

Question:

17 Mr. Gilmore asked the Minister for Education if he will outline his response to the comments made by the Comptroller and Auditor General in his report for 1990 regarding the purchase of Carysfort College; if, in particular he will make a statement on the fact that the Auditor General states that the Valuation Office put a value of £3.8 million on the property; if he will publish the report his Department received from the Valuation Office; and if he will make a statement on the matter.

Gerry O'Sullivan

Question:

18 Mr. G. O'Sullivan asked the Minister for Education the reason his Department did not insist on an independent professional valuation in relation to the purchase of Carysfort College by UCD; and if he will make a statement on the matter.

I propose to take Questions Nos. 11,17 and 18 together. I would refer the Deputies to the statement I made on the Seanad Adjournment on 21 November which covered most of the matters raised in these questions.

In relation to the valuation of £3.8 million received from the Valuation Office in August 1989, the Department's understanding was that the Valuation Office determined the valuation from a commercial point of view, i.e. market value, and not on the basis of its value for appropriate use as an educational institution, and that the valuation for the property was equivalent to its land value. While professional reports are confidential I can indicate to the House that the report of the Valuation Office was in the form of a short letter which expressed the opinion that the market value of the property at that time, August 1989, was in the region of £3.8 million.

My Department have clarified that the valuation related to the position at a particular time and that, in addition, in arriving at what was a low valuation the valuers took account of specific conditions which imposed restrictions on the use of the property. For example, the sisters would be occupying part of the building for two years, which would limit development in that period, and despite this a purchaser would have to undertake over that period at a cost of the order of up to £2 million maintenance and security.

The valuation did not include a sports complex and related land which was part of the property. A separate five acres of land was included as playing fields; this area is zoned for housing and would have a substantial saleable value in its own right. The valuation was somewhat lower than the value which would have been arrived at if calculated simply on the basis of a cost per acre for the overall site area. The valuation would clearly have been much higher if the restrictive conditions had not been a factor, which was the position when the property was being acquired by UCD. In addition, the Valuation Office have confirmed that a valuation carried out in August 1989, would have little relevance at the time of acquisition almost one and a half years later, when completely different market conditions would apply.

I would emphasise that ultimately an agreed price would be determined on the basis of negotiations rather than a valuation arrived at separate from such negotiations when, of necessity, any valuation would have a subjective element. In this regard an alternative valuation provided for the Mercy Order by a reputable firm of valuers fully supported their offer for sale to my Department of the buildings and 15 acres of land for £8.5 million.

In the circumstances the valuation of £3.8 million provided by the Valuation Office would have served as a basis for an opening offer should it have proved possible to enter into meaningful negotiations for its purchase at that time. This was not possible then as the price was stated to be not negotiable and the time allowed for consideration of the offer was unrealistic.

Solicitors for the vendors subsequently stated, on 2 October 1989, that they were open to an offer but one which they confirmed would have to be firm, and realistic, in the context of the vendors' asking price of £8.5 million for the buildings and 15 acres or £10 million for the buildings and 20 acres, and be received before 5 October 1989, i.e. within three days, which was the date on which tenders were due for the entire property. This option could not be taken up because of the time scale and because an appropriate use had not been found for the property.

A greatly reduced offer of £8.25 million for the buildings and 20 acres, received in February 1990 was similarly not taken up on the grounds that an appropriate educational use for the buildings had still not been determined.

I want to stress that at no time was an offer of sale made to the Department at a price less than the eventual purchase price of £8 million negotiated by UCD.

Suggestions were made that the Department should purchase Carysfort on the basis of negotiation. This suggestion was not feasible since the Department do not operate third-level colleges. A further consideration was that unless a definite use for the premises had been established before its acquisition, substantial maintenance, insurance and security costs would have arisen. The suitability of the premises for use as a regional technical college was considered. A detailed study carried out by technical officers of the Department made it clear that it was not suitable for this purpose. Its use for the business graduate school was not in question at that time in view of the plans to develop it at Roebuck.

As the President of UCD noted in his recent statement, the situation changed in 1990 when financial problems arose regarding the development of the business school on the Roebuck site. The possibility thus presented itself for the first time that the Government's policy on expanding third level places and UCD development plans for its business school could not coincide.

The proposal by UCD to develop their graduate business school at Carysfort presented an ideal use for the property. The range of facilities available in Carysfort, residential accommodation, language laboratories, lecture theatres, sports facilities, etc., make it ideally suited as a business school.

On a point of order, are five page essays which we have already heard to be taken as substantial answers?

It is gone 3.20 p.m.

Deputy Higgins, I have no control over the Minister's replies.

The Minister did not mention Pino yet.

I do not know the man, I never met him and I never saw him.

You do not have to know him to have it in the script.

We had that discussion before in regard to mentioning people in the House.

I would remind the House that the question of making the facilities at Carysfort available to UCD was in question since 1987 when a committee chaired by the then Chairman of the Higher Education Authority recommended accordingly.

The college has the authority, under its charter, to buy and sell land. The State has never had any reason to believe but that the authorities of all the universities have acted with the utmost integrity and professionalism in these matters.

I have been assured by the UCD authorities that it was only after intensive negotiations, using all necessary technical and commercial expertise available to them, that the final price of £8 million was agreed. The UCD authorities are happy that the acquisition has provided them with the finest campus in Europe for its purpose and that it represents excellent value for money. I fully concur with the view, which is fully supported by expert technical evaluation carried out by the staff of my own Department.

All proper procedures were followed in relation to the purchase of Carysfort. The payment of a grant to a university, for the acquisition of a property, through the Higher Education Authority, is determined on the basis of the property being required for the educational purposes of the university, that due process of negotiations were followed and that the acquisition represented value for money. My Department satisfied themselves that all these conditions were met in accordance with normal procedures, which do not include the seeking of an independent valuation outside of any evaluation carried out by technical staff of my Department. I am fully satisfied that the negotiating team acted professionally and responsibly in concluding negotiations and arriving at an agreed price. To suggest otherwise would be to impugn the integrity of the high calibre people involved.

Authority from the Department of Finance and Government were secured as was Dáil approval for the necessary Supplementary Estimate and payment was made in the normal way through the Higher Education Authority.

The acquisition of Carysfort is a major addition to the third level education sector providing an ideal facility for a major business school and freeing up not fewer than 600 undergraduate places in Belfield, in line with Government policy to expand the availability of third level places.

The accounting officer of my Department has replied to the query from the Comptroller and Auditor General referred to in the question and the reply is similar to the statement I made in the Seanad on 21 November, to which I have already referred.

The Minister's reply of six pages is a prime example of using the art of tautology to take up as much time as possible; it is a filibuster.

Initially I should have welcomed the Minister to his first session at Question Time. Let me also say he would be very foolish to allow himself to be used as a smokescreen in this hottest of political potatoes which goes right to the Taoiseach's own front door.

Will the Minister not agree it is very strange that, one month after the Valuation Office valued the 20 acres of land and the college at £3.8 million — and the Comptroller and Auditor General was quite clear and specific about this — the Mercy Sisters through their solicitors informed the Department of Education that the price was negotiable, that they were open to offers, that a reasonable bid should be made and they would bring the price down accordingly, and that the Department of Education decided not even to reply to that correspondence, let alone enter negotiations?

There were three days to reply. The amounts were £10 million for 20 acres and £8 million for 15 acres; there is a vast difference there. At that time we had no educational use for it. It was only when Roebuck failed that this arose. At no time——

But Pino was left stuck.

I do not think it is in order to name names in the House. I am not aware of these people.

Do it outside the House.

I have done.

I have the utmost trust in the officers of the Department of Education. I have had long discussions and they are happy with the integrity of all those concerned in this matter.

It is no reflection on UCD.

The time available for priority questions is exhausted.

As my ordinary question was taken with a priority question and as we are now out of priority time, may I ask a supplementary on that?

No, we must conform to the procedure.

I wish to protest. A very substantial part of my question was not answered.

That may be so, Deputy, but the Chair is conforming with Standing Orders only. I am now coming to other questions in the name of Deputy Brendan Howlin.

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