Vol. 551 No. 4
1 Mr. Higgins (Mayo) asked the Minister for Public Enterprise the meetings she had with former chairmen or the current chairman of CIE regarding the disposal of CIE property; and if she will make a statement on the matter. [10654/02]
During the course of a meeting in November 1998 with the then chairman of CIE, Mr. Brian Joyce, he indicated to me that the gross proceeds from property sales would generate valuable funds for CIE for reinvestment and that, in the case of a site at the North Wall, a very valuable income stream could be generated from its development.
Since then, both the previous chairman and the current chairman, Dr. John Lynch, have proceeded with the sale of some properties. In relation to the North Wall site, the scale of planning permission originally sought was reduced significantly by An Bord Pleanála. Subsequently, a revised scheme of development was prepared by the Dublin Docklands Development Authority and this is awaiting approval from my colleague, the Minister for Environment and Local Government. If approval is received and the site is developed, income will be generated for CIE, the precise level of which will be determined by the pace of development on the site and prevailing market conditions.
(Mayo): Does the Minister accept that we are dealing with a financial scandal? The Spencer Dock saga makes the mini-CTC project which led to the establishment of a special inquiry by a committee of this House pale into insignificance. In 1998, the Minister told the then chairman of CIE that it must choose a private sector partner for the development of 51.5 acres at Spencer Dock. CIE entered a legally binding agreement to lease the land to Treasury Holdings with a value, according to CIE, of between €300 and €354 million in 1998. Land in the immediately adjoining area, however, was fetching double that. CIE got no upfront payment and it has been estimated that the deal with Treasury Holdings for State owned property could be worth in the region of £2.3 billion.
Did CIE commission three different estate agencies to advise it on the deal to ensure best value for the company and the taxpayer? If these reports are available, will the Minister put them into the public domain so we can see exactly what happened?
I expressed to Mr. Brian Joyce, who was chairman when I took office, my doubts about the determinedly optimist forecast he gave me. Not alone did I meet him to discuss this, he wrote me a letter on the matter which is on file and which I will release to anyone who wishes to see it. I said to him then, and to the current chairman, that I was not satisfied with the forecasts, which I thought wildly optimistic. I expressed my severe doubts about the forecasts to the then chairman and the property consultants, who have since vanished from CIE. I will be happy to make public the letter Mr. Joyce wrote to me.
(Mayo): Does the Minister accept that she is the main shareholder in the holding company – CIE? This company received a subvention of £50 million between its subsidiaries and itself in 2001. Will the Minister summarise the contents of the letter to which she is refer ring? What is the duration of the lease into which CIE is locked with Treasury Holdings? What is the involvement of PricewaterhouseCoopers, which is the company's auditor and the anchor tenant? Is she concerned that there has been such flagrant disregard for Government and EU procurement rules? Has she established why there was no tender announced in the media or the official journal of the EU? Is the Minister aware that one of the bidding companies, Moytura Developments, a Canadian consortium, led an official complaint to the EU claiming that CIE had broken EU and Government guidelines?
The Deputy has asked for a synopsis of the letter; I will give him the full letter and I will pass on precise answers to the Deputy's other questions. The letter, dated 23 November 1998, refers to a letter from me to Mr. Joyce on 5 October and a meeting we had on 6 October. It also relates to other matters related to the property. I would also like to see precise details and will furnish them to the Deputy in answer to his questions. Not all of the matters to which he referred are on file here but I will pass them on to him with the letter.
(Mayo): The letter was written in 1998 and it is now 2002. CIE is a State company, in which the Minister is the main shareholder, that is strapped for cash and needs a State subsidy. It is crying out for investment, yet 51.5 acres of prime land have been given away for nothing – no up front payment and 16% of its value is all it will ever realise from rental. What will the Minister do about it?
The matter is entirely commercial and contracts entered into by the then chairman would be binding. The Deputy knows that. I will apprise the Deputy in full of the matters related to contracts entered into by the then chairman of CIE.
