I welcome the opportunity to address the committee today and to answer questions on the special report undertaken by the Comptroller and Auditor General and the Dublin Docklands Development Authority's annual report and financial statements for 2011. I have circulated a short briefing paper, as requested, which I hope will be of help to members. My colleagues and I will make every attempt to assist with the committee's questions today.
The Dublin Docklands Development Authority understands there is very considerable and legitimate political and public interest in the authority. For several years, the authority has generated considerable controversy. Substantial costs have been incurred as a result of a number of decisions taken by the authority and we are engaged in a high-profile and controversial court action. This morning I want to communicate three things very clearly. First, on behalf of the authority, I want to apologise for past serious errors of judgment that were made. It is clear several decisions taken by the authority, particularly in the purchase of the Irish Glass Bottle site, were, in retrospect, wrong and have exposed the authority to considerable costs. Since 2009, under the chairmanship of Professor Niamh Brennan, the outgoing executive board of the authority has been very clear that it will not attempt to ignore these judgment errors that were made or to understate the consequences of those for the authority or for anyone else.
Second, I confirm to the committee the authority continues to do everything in its power to deliver on its statutory role, fulfil its public service remit as professionally and efficiently as possible while in the process minimising further cost to the authority. We have instituted substantial procedural reforms to our planning, financial and management systems. The committee will be aware that the authority is to be wound up over the next 18 months but that new structures and arrangements are to be put in place to ensure the focus on the regeneration of the Docklands project.
Third, I want to also remind people that many aspects of the docklands project were successful and there is much of which we should be proud. Inevitably, and correctly, in recent years the attention has focused on what went wrong and where there were poor investment and management decisions which is understandable. However, in the history of the docklands project - going back to the late 1990s when it was established as a more ambitious successor to the Custom House Docks Development Authority - there have been some very important achievements.
A significant part of Dublin city centre has been transformed into a dynamic and modern thriving community. Thousands of jobs have been created in the docklands including 20,000 alone in the International Financial Services Centre, in the legal services hub and the growing digital sector in the Grand Canal Dock area. Some of the finest office buildings in the country have been built and are occupied by major national and international employers such as Citibank, Bank of New York Mellon, State Street Bank, McCann Fitzgerald and of course a new wave of technology companies led by Google and Facebook. The Docklands is a radically improved urban environment with a population of over 26,000, an increase of 53% since the 1990s which has been facilitated by the delivery of over 3,300 housing units under section 25 planning schemes. Educational standards and resources for what was once a very deprived area in the country have been transformed to the benefit of local children and the community. The authority has invested over €6.2 million in a range of education programmes for children enabling them to participate in the regeneration of the docklands area. New cultural and tourism facilities have been developed and opened, animating the area with attractions including the Bord Gáis Energy Theatre, the O2 and the Convention Centre Dublin, attracting both domestic and international visitors to the docklands every day.
While these successes have been somewhat overshadowed by poor investment decisions made in the past, they are an important part of the story of the docklands. The particular focus of today's meeting is the special report of the Comptroller and Auditor General and the authority's annual report and accounts for 2011. As the committee is aware, the Office of the Comptroller and Auditor General was assigned responsibility for the audit of the docklands authority commencing with the accounting year ended 31 December 2010. The purpose of the special report was to record the overall financial status of the authority, the process, procedures and financial implications of the authority's decision to purchase the former Irish Glass Bottle site and how the planning functions and governance arrangements of the authority are being administered.
While the report identifies some shortcomings in the authority's procedures and decision-making in the past, most notably in the context of the 2006 part-purchase of the former Irish Glass Bottle site, the general conclusion of the special report is that the authority has taken steps to scale back its operations in light of its changed financial circumstances. It has also substantially implemented the recommendations of previous reviews of planning and financial management systems since 2010.
In its 2011 annual report, the authority reported a surplus of €1.1 million in 2011, compared to a deficit of €1.98 million in 2010 and a deficit of €213 million in 2008. However, the authority also recognises continued uncertainties for its financial position but has concluded there is a reasonable expectation the authority will be able to meet its liabilities as they fall due for the foreseeable future.
Expensive lessons have been learnt and the docklands authority today is a very different organisation to what it was six years ago when the Irish Glass Bottle site was purchased by the joint venture company, Becbay Limited. It is clear the authority's involvement in the purchase of the Irish Glass Bottle site was a serious error of judgment. Instead of contributing to the wider docklands project, it has harmed and undermined the delivery of that project.
While the authority is not the only development body to have been impacted by the recent property downturn, as an organisation we have paid a heavy price but have been able to stabilise our financial position and to set the docklands project on a sound footing as it evolves into the next phase of its delivery.
It should also be noted that there remain a number of strategic sites in the docklands area, specifically in the North Lotts area, between the Convention Centre and the Point Village, and in the Grand Canal Dock area, comprising approximately 20 hectares, which have the potential to deliver a further 3,000 homes and over 300,000 sq. m of commercial space which could, in turn, deliver an estimated 10,000 new jobs and a significant return to the taxpayer in the future.
There is much to be done to complete the regeneration of the docklands. We will continue to do all in our power to progress that mandate and facilitate whatever arrangements the Government decides to put in place to manage the docklands project into the future.
Finally, I want to stress that we wish to provide the committee with as much information as possible today. However, as the committee will be aware, the transaction to purchase the Irish Glass Bottle site is the subject of a legal action and we are somewhat constrained in the comments we can make on that matter at this time. We will do all we can to answer questions from our examination of materials relating to the issues being examined today.
