Dáil Éireann debate -
Wednesday, 30 Sep 1998

Vol. 494 No. 2

Adjournment Debate. - Sale of State Lands.

Mr. Howlin

I thank the Ceann Comhairle for selecting this matter as the first item on the Adjournment in the new Dáil session. I also thank the Minister for the Marine and Natural Resources, Deputy Woods, for coming before the House to take this debate.

The Minister is aware of the deep concern and unease at the circumstances surrounding the sale in January 1992 of 147 acres of State forest lands to Roadstone (Dublin) Ltd. In January 1987 Hudson Brothers Ltd., a long established sand and gravel company, contacted the Department of Energy and expressed in writing an interest in acquiring the gravel at Glen Ding. The response from the Department on 22 June 1987 stated that "the material in question is not surplus to our requirements, it is not intended to dispose of it in the foreseeable future". Following representations from Hudson Brothers to Deputy Flood and the late Deputy Sean Walsh, the then Minister for Forestry, Deputy Michael Smith, replied in writing on 5 November 1987 and stated:

I have made inquiries for you in the matter and the position is that the sand and gravel deposits are required for State afforestation purposes and as such are not available for sale. I would like to add that even if the deposits were available for sale, the area could be offered for sale by public tender competition in accordance with Department of Finance delegated sanction for such sales.

This clearly stated policy outlined by the then Minister, Deputy Michael Smith, was subsequently entirely ignored.

Despite the clearly expressed interest of Hudson Brothers, of another party — Mr. Brendan Johnston — and others as indicated to me in a letter from the Minister for the Marine and Natural Resources, Deputy Woods, on 21 September this year which stated "the Department's files indicate that a number of parties had expressed interest in the lands prior to the decision to dispose of the lands to Roadstone", these lands were sold by private treaty to Roadstone. The Minister's letter also indicates that "the then Minister for Energy was satisfied that if the land were put on the open market it would most likely fail to reach the price on offer from Roadstone (Dublin) Ltd".

The then Minister for Energy, Deputy Molloy, through a spokesman, informed The Irish Times in July of this year that “when Minister Molloy approved the sale he was not aware that Hudson Brothers had expressed interest in buying the land. As far as Minister Molloy was concerned the only two interested parties were CRH and a businessman, Mr. Brendan Johnston”. It seems incredible that valuable land was sold for £1.25 million — including the price paid for the trees on it — sanctioned by “a Minister who was unaware that a number of parties had expressed interest in the lands prior to the decision to dispose of them to Roadstone”. If Deputy Molloy is to be taken at his word — I have no reason not to believe him — then vital information which it is now acknowledged existed in the Department of Energy was kept from him when he sanctioned this sale.

There are many issues which require investigation in this matter. The circumstances I have outlined require urgent investigation. Deputy Roche raised this matter at the Committee of Public Accounts and sought such an investigation. I would like to share some of the remaining time with the Deputy to afford him the opportunity to make a contribution.

An Leas-Cheann Comhairle

Agreed, but there are only 30 seconds remaining.

Mr. Howlin

The Government and this House must provide a mechanism to fully explore these matters. I expect the Minister to share my concern and to provide the means to arrive at the truth.

Mr. Roche

My personal views and grave concerns about this matter have been a matter of public record for over 12 months. I do not know if wrongdoing occurred in this case or if an administrative error was made. However, I know the sale of that land was not completed in an appropriate way. I wrote to the chairman of the Committee of Public Accounts in December, February and July and he afforded me an opportunity to make a presentation to the committee on 17 September. Following my appearance before the committee I submitted a substantial amount of documents for its consideration.

There is clear prima facie evidence that this matter must be investigated. I requested the Committee of Public Accounts and the Comptroller and Auditor General to carry out such an investigation. I am not suggesting that the then Minister for Energy, Deputy Molloy, was in any way culpable; I believe he was not. A reading of the files or the papers in my possession clearly indicates that he acted with the utmost propriety, as did the then Minister for Forestry, Deputy Michael Smith. However, something wrong occurred in this case because 25 million cubic tonnes of sand and gravel were sold at a price of less than 2p per tonne when the sand and gravel had been valued at in excess of £2 per tonne.

It would be in the public interest for the Committee of Public Accounts to open the files and examine them. Regardless of whether wrongdoing is discovered, it would be in the public interest for people to be made aware of that. I thank Deputy Howlin for sharing time.

Minister for the Marine and Natural Resources (Dr. Woods)

I thank the Deputy for raising this matter, which has been raised on a number of occasions. The Secretary-General and Accounting Officer of my Department who reviewed the relevant papers, advised that there was no evidence to suggest that there was any impropriety in this matter. I also refer the House to a reply by the then Minister for Agriculture, Food and Forestry, Deputy Yates, to a parliamentary question on 15 May 1997 which sets out in detail the circumstances surrounding the sale of these lands.

I will set out these circumstances again. The property in question at Glen Ding Woods was sold in December 1991 to the then Department of Energy which at the time had statutory responsibility for forestry matters. On foot of a Government decision in 1987 that a programme for the sale of State property should be devised and the receipts therefrom be used to redeem the National Debt and in line with all Departments the forest service identified a number of suitable properties for sale. The possible sale of the Glen Ding lands arose in that regard.

The interest shown by Roadstone brought to notice the potential sale value of those lands and the contribution the proceeds of any sale would make to meeting the Department of Energy's budget requirements. However, progress in moving forward was slow. The initial deliberations within the forest service focused on disposal of the Glen Ding lands by public tender. There were assessments of the value of the lands and consideration of the merits of seeking planning permission before offering the lands for sale. In that context there were discussions with independent consultants from September 1988 onwards in regard to disposal of the property at the best possible return to the Exchequer. Various reports were submitted by those consultants from December 1988 onwards.

They advised that the Department invite offers by tender for the sale of the land in April 1990. Detailed assessments of the property were carried out by the Geological Survey of Ireland and the consultants to evaluate a fair market price for the property. Based on the GSI assessment and taking into account an estimate of the capitalisation discounted royalties for the 20 year life of the deposit the consultants valued the property at £1.23 million with planning permission and £821,000 without.

However, following an offer for the property by Roadstone Ltd. the consultants subsequently advised in October 1990 that it would be most unlikely that any other party would be able to match this offer and strongly recommended that the sale be pursued. The then Minister for Energy accepted that advice and the land was not advertised for public sale. The consultants' view was that the Roadstone offer would represent a very satisfactory outcome and that it would be unlikely that any other potential buyer would match or exceed the offer considering the planning difficulties to be faced and the strategic advantages which undoubtedly favoured Roadstone as an adjoining property owner.

The House will also be aware that the planning difficulties in regard to the site anticipated by the consultants in 1990 have come to pass as reflected in the recent decision of An Bord Pleanála to refuse planning permission for the company to begin quarrying on these lands. Following subsequent negotiations with the company an improved offer of £1.25 million without planning permission was made. In accordance with the guidelines on the disposal of Government property where a sale is not conducted by public tender or auction the sanction of the Department of Finance to the sale of the lands to Roadstone other than by public tender was sought and obtained in December 1990 after which the offer was accepted.

The price paid by the company was substantially in excess of the expert valuation secured by the Department of Energy. The Department's files indicate that a number of parties expressed interest in the lands prior to the decision to dispose of the lands to Roadstone. It is not clear from the records available to what extent consideration was given to notifying other interested parties that it was proposed to dispose of the property and that the manner of disposal would be by private treaty subject to satisfactory terms being negotiated. However, it can be inferred that having formed the view that the Roadstone offer was likely to be the best available the judgment was made that such notification was not warranted.

It is worth pointing out, as was indicated by the former Minister, Deputy Yates in May 1997, that the only other firm offer on the table when negotiations with Roadstone were in progress was significantly lower and was not therefore accepted. I and my Department would be happy to co-operate with any examination that the House may wish to carry out and to facilitate the Committee of Public Accounts in any such examination. The matter was previously considered by the Oireachtas Joint Committee on State Sponsored Bodies and its chairman, former Deputy Kavanagh. He held an investigation into the matter, perhaps of a limited nature, because it is such an extensive matter.