I welcome the Minister of State, Deputy Alan Kelly.
Adjournment Matters
Youth Guarantee
I also welcome the Minister of State. This matter on the Adjournment is about the youth guarantee. I know that the youth guarantee implementation plan was forwarded to the European Commission at the end of December and it is my understanding that the Minister for Social Protection is making arrangements for its publication. The plan is supposed to clarify how the partnerships between the public authorities, employment services, education and training providers, social partners, youth organisations and other stakeholders will be organised.
A Council recommendation on 22 April 2013 on establishing the youth guarantee stated the following.
The starting point for delivering the Youth Guarantee to a young person should be the registration with an employment service, and for those NEETs who are not registered with an employment service, Member States should define a corresponding starting point to deliver the Youth Guarantee within the same four month time-frame.
I am raising this point after consultations I had in Ballymun with various groups in respect of the pilot project. Representatives of a youth group who work with young people of all ages were only invited to a meeting and essentially just told what was happening. There was no consultation and there was no indication of any symbiotic relationship that developed between the implementation group and the youth group on how best to achieve positive outcomes for the young people in the area. Something even more startling was an issue raised by one of the service providers of the pilot project, who informed me that the pilot was only aimed at young people on the live register. Is this the case? What about the Council recommendation that an alternative starting point should be established for those not registered with the public employment services? How is the Department proposing to deal with these young people? If the pilot scheme does not have such a corresponding starting point and youth groups and organisations are not feeding into the process, are we not running the risk of having a guarantee for some young people but not all? This is inherently unfair. There should not be such a narrow focus on the live register numbers. Is the guarantee for one step in a person's life, or for a process of personal development in a life career?
For example, are we guaranteeing just one intervention or what further steps will be taken to ensure it is not a case of one has had one's chance, the boxes have been ticked and one has been given X, Y or Z and then one has to find the next step in the person's progression, irrespective of whether that person is back on the live register within a short period.
Given that we have heard of upswings in employment, it is important to support young people with a quality education, training and apprenticeship opportunities in order that they can get jobs when they become available. There is a need to ensure the development of the person in terms of a career, not just putting him or her in any old job. There is a danger that without these supports, whether basic literacy supports, mentoring, skill sampling or others, some young people could be left behind. That is the reason the youth guarantee must deliver quality places and avenues of progression for all young job seekers and not only those registered with the employment services. That is the reason I am interested to know how the implementation plan is proceeding and when it will be published.
I thank the Senator for raising the issue. I am responding on behalf of my colleague, the Minister for Social Protection, Deputy Joan Burton, and I am glad that I can provide an update on recent developments.
The EU Council recommendation on the youth guarantee is that member states should, "Ensure that all young people under the age of 25 years receive a good-quality offer of employment, continued education, an apprenticeship or a traineeship within a period of four months of becoming unemployed or leaving formal education". In agreeing this recommendation, the European Union accepted that the guarantee would need to be implemented over a period of time on a phased basis in countries such as Ireland facing very significant fiscal constraints.
The development of an implementation plan for the guarantee was led by the Department of Social Protection working with the support of an interdepartmental group of senior officials from the Department of Education and Skills, the Department of Jobs, Enterprise and Innovation, the Department of Children and Youth Affairs, the Department of Public Expenditure and Reform and the Office of the Tánaiste. In developing the plan the interdepartmental group took account of submissions received as part of a consultative process with stakeholders, and the outputs from various EU meetings, including meetings of EU Heads of State. The group had also consulted with the OECD.
After getting approval from Cabinet late last year, the youth guarantee implementation plan was finalised and forwarded to the European Commission at the end of December. The Minister for Education and Skills and the Minister for Social Protection expect to publish the plan next week. The OECD report on the development of a youth guarantee for Ireland will be published at the same time. The plan brings together all Government measures in 2014 across a range of Departments that contribute to the transition of young people from education to work and from unemployment to work. In keeping with the Government's broader focus on tackling long-term unemployment, the plan will in the first instance target interventions at those young people most at risk of long-term unemployment as the guarantee is introduced on a phased basis. Ireland already has most of the key elements of a youth guarantee, as identified by the European Union, in place, including a quality offer of second level education for all young people under 18 years; second chance education-training options for early school leavers via Youthreach and community training centres; access to free third level and further education programmes; apprenticeship and work-focused training initiatives such as Momentum; State-supported internships such as JobBridge; targeted employment subsidies such as JobsPlus; work experience options such as Tús and Gateway; and reformed employment services which combine the delivery of welfare with job search-guidance services and employer engagement.
In order to maximise the return from structures already in place, the youth guarantee will build on existing programmes, reserve places on existing programmes for young people who are already long-term unemployed on a phased basis and develop variants of these programmes and offers tailored specifically for unemployed young people. These tailored offers will include earlier and faster engagement for young people under Intreo, new options under JobBridge for the most disadvantaged cohort of young people, new options under the JobsPlus recruitment subsidy scheme to accelerate the entry to work of young people and enterprise supports to help young people start their own businesses.
It is estimated that expenditure on programmes providing employment, training and further education opportunities for young people will be in excess of €500 million in 2014. This refers to both existing and new funding, including the EU funding that is expected to be drawn down. As part of this overall 2014 provision and as an initial step towards preparing for implementation of the guarantee, specific provision was made in the 2014 budget for reducing the threshold, in terms of duration of unemployment, for JobsPlus eligibility from 12 months to six months or less - in the case of persons aged less than 25 years; an additional intake of 1,500 young people on to the very successful JobBridge scheme; ensuring 1,000 places on the Tús scheme are targeted at young people; developing a pilot programme to support young unemployed people to take up opportunities under schemes such as Your First EURES Job; ring-fencing a minimum of 2,000 training places for under-25s by the Department of Education and Skills, under a follow-up to the successful Momentum programme that operated in 2013, with income support for participants being provided by the Department of Social Protection; and the Department of Jobs, Enterprise and Innovation making €2.5 million available to young entrepreneurs via Microfinance Ireland and other business start-up schemes. In total, the provision across these specific headings in the 2014 budget amounts to €46 million.
In relation to the Senator's question on the Ballymun youth pilot, the first referrals to the project began last week at the Ballymun Intreo office. All persons aged under 25 years on the live register in the Ballymun area will be eligible for the pilot.
The pilot involves an initial group engagement at the Intreo office followed by a referral to the local employment service, LES, for a one-to-one interview with a LES officer where a detailed progression plan will be prepared. The result of this progression plan will be an offer of a training, education, work experience, or job within four months.
I am pleased to say there is significant commitment from employers both locally and in Dublin city more generally to provide the young people with job placements and work experience. An employers' meeting will be co-hosted by IBEC and the Dublin Chamber of Commerce next month to facilitate the active participation of the business sector in the pilot.
Other initiatives taking place as part of the pilot include an event to promote youth entrepreneurship organised by Dublin young entrepreneurs and bilateral arrangement to provide apprenticeship and language learning opportunities in Germany. These initiatives are being partly funded by the European Commission which awarded us €250,000 towards the total cost of the project, which is just over €300,000. There will also be an ongoing evaluation to ensure the pilot scheme is adapted in the light of experience as it progresses and to gain early lessons that will be applicable to the wider roll out of the youth guarantee across the country.
A dissemination conference will be organised to highlight the outcomes of the pilot scheme and to feed into the national and EU discussion on the development of future youth guarantee schemes that are relevant to young people and labour market integration.
I thank the Minister of State for taking the matter on behalf of his colleague. Perhaps he might bring back to the Minister for Social Protection, Deputy Joan Burton, the issue regarding the Council recommendation and the corresponding starting point for the guarantee for those young people who are not registered with an employment service as the answer given was that to be eligible young people must be under 25 years and on the live register.
That is no problem. I will convey the Senator's comments to the Minister. The one thing I would say is that it is an innovative process and it is the coming together of many different programmes. To be fair, this is something that has been broadly welcomed across the political divides. We will have to learn initially from day 1. Obviously, the focus will be on those under 25 years who are on the live register. As the plan develops and from these learnings we need to ensure the interventions are right. I accept the point that a progression plan may be needed and I expect that will be put in place. Certainly I will convey the Senator's point to the Minister concerning those who are not on the live register. I would point out, however, that given the various processes and the volume of schemes in place in Ireland, unlike many other countries, the number who are not registered in some way is quite low. That is good.
Inland Waterways Development
I welcome the Minister for Arts, Heritage and Gaeltacht Affairs, Deputy Jimmy Deenihan. I am grateful that he is taking my question.
I have a great grá for the canals system. I was fortunate to grow up in Monasterevin, along the canal, and have fond recollections of fishing and swimming there and encountering champion pike, roach, perch and bream. I spent many school summer holidays watching the barges and leisure craft going through Coughlan's lock, Moore's lock and the famous aqueduct in Monasterevin across the River Barrow.
This is, therefore, of particular interest to me. I commend the Minister and his predecessors because the canal systems and inland waterways have in many respects come in from the cold, from an era when they were disused and derelict, and used as dumping grounds. To my horror in the 1960s whole tracts of the canal were filled in and lost forever.
We do not put the same store and stock in the canal and inland waterways resource here as people do in the United Kingdom and elsewhere in Europe. That is very unfortunate. Spurs of the canal to towns such as Mountmellick and Portarlington, which would now be a huge asset and resource for tourism and leisure activity have been lost forever. As the Minister knows, the canal system has been immortalised in ballad, verse and poetry. There are concerns that we are about to take some retrograde actions. If at all possible, will the Minister extend the Waterways Ireland period of consultation for the proposed new canal by-laws? The consultation period is due to expire on 3 February. It was only one month, which is too short. There is too much at stake for us to rush into this and put into legislation any measures that would curb or prohibit the use of the canals or be a retrograde step.
Inland waterways associations such as those in Offaly, including Tullamore and other towns such as Edenderry, Rathangan, Monasterevin, Vicarstown and Athy are grievously concerned about this and the Minister’s intervention would be most helpful. We want to be positive and constructive, but it is vital that we do not bring forward new by-laws that would impede access or impose prohibitive costs on leisure craft users and boaters, or would in any way impinge on the tourism asset and discourage tourists from using the fabulous canal network which comes from the capital in Dublin through the Royal Canal and Grand Canal to the midlands, from where I come.
Waterways Ireland is undertaking two public consultation processes. The consultation process on the draft corporate plan, to which the Senator refers, will be open until 31 March. The corporate plan, once finalised, will provide the strategic planning framework which will guide Waterways Ireland's operational work programmes in the next three years. The other consultation process relates to proposed by-laws made under the Canals Act. That Act empowers Waterways Ireland to make by-laws for the care, management, maintenance, control, regulation and use of the canals.
Our waterways make a vital contribution to tourism, attracting visitors from around Ireland and from abroad. There are over 14,000 registered boat owners on the seven waterways managed by Waterways Ireland. The proposed by-laws are intended to support the investment already made by Waterways Ireland in new infrastructure and facilities along the canals. They will enhance Waterways Ireland's ability to manage, care for and maintain the canals and to help to develop them as a vibrant recreational and tourist amenity for all waterway users.
There will be new by-laws for the management of house boats and the charging regime will also be modernised. In particular, there will be further provision for the care, management, maintenance, control and regulation of the use of the canals; moorings on the canals and their use by the public for recreation and navigation purposes; an amendment to the schedule in the 1988 by-laws relating to tolls and charges, described in the first schedule to the draft amendment by-laws; provision for the care, management, maintenance, control and regulation of the use of the canals and moorings on the canals by houseboats; and a fixed payment notice procedure for alleged offences for breach of the by-laws. The consultation on the draft by-laws which commenced on 6 January is open to the public for a period of 21 working days in accordance with the Canals Act 1986. This public consultation process closes at 3 p.m. on 3 February.
I am informed by Waterways Ireland that the main stakeholders which include the Inland Waterway Association of Ireland, the Heritage Boat Association, the Royal Canal Amenity Group and the Irish Boat Rental Association have been contacted individually and invited to meet the chief executive and the senior management team of Waterways Ireland prior to submitting their consultation responses. At this meeting these groups will be given the opportunity to express their views, opinions and concerns they may have in relation to the amendments to the by-laws. All current permit holders on the Grand Canal have received individual written notice and have been given the opportunity to respond within the consultation timeframe on an individual basis.
During this public consultation period, anyone, including those who have any concerns on the proposed amendments to the by-laws, should make written submissions to Waterways Ireland during this 21 day consultation period which closes at 3 p.m. on 3 February. The draft by-laws and the draft corporate plan 2014-16 may be inspected and downloaded from the Waterways Ireland website at waterwaysireland.org. Alternatively, they may be inspected by arrangement by visiting the Waterways Ireland offices and headquarters at Enniskillen. The draft by-laws may also be inspected by arrangement at Waterways Ireland's eastern regional office, Ashtowngate, Dublin 15.
Following completion of the consultation period, Waterways Ireland shall then consider all written responses before finalisation of the approach it intends to take to the new by-laws. From a safety, environmental and best practice point of view, it is appropriate that Waterways Ireland would consider whether the current by-laws are fit for purpose and should be modernised, where appropriate. It is also appropriate that it consult users before making changes to the by-laws. This is the process which is under way.
I thank the Minister for his comprehensive answer. I urge him, however, to use his influence and good offices as the Minister with line responsibility in this area - I know that he has a strong interest in heritage and tourism - to urge Waterways Ireland to extend the consultation period. What harm or hurt could come from this? Some 21 days is not sufficient. There is too much at stake. There is an element within the proposed by-laws of over-bureaucracy and bureaucracy gone mad. We should be encouraging people and voluntary organisations such as inland waterways associations to use the canals, to develop them for the benefit of local communities, for leisure craft users and to develop tourism. A period of 21 days is far too short and I urge the Minister to meet me half-way on this, to use his good offices and influence to have this period extended in order that some outstanding issues of concern can be addressed in a constructive manner to everyone's benefit.
As I said, the consultation on the draft by-laws which commenced on 6 January is open to the public for a period of 21 days in accordance with the Canals Act 1986. If it can be extended, I will certainly suggest that, but if it is within the restrictions of the Act, that may not be possible. If it is possible, I will certainly consider it and inquire whether there is flexibility within the Act. If there is, I see no reason it could not be extended. Perhaps the short timeframe is due to the Act. If it is possible, I will consider it.
Arts Funding
I thank the Minister for coming into the House to deal with this matter. It is not always possible for Ministers who are directly responsible for the matter tabled to come to the House.
This year marks the 125th anniversary of the Clare Association in New York. The Clare Association is one of the more prestigious Irish associations in New York and has played a significant role in promoting County Clare and Ireland in New York and throughout the United States. As part of its celebrations and given that this is the millennial anniversary of the death of Brian Ború who, as the Minister is aware, had significant connections with east Clare, the Clare Association has invited the Tulla Pipe Band which is rich in culture and tradition.
The Tulla area of County Clare is representative of the quality of traditional music and music in general in this country. As well as the Tulla Pipe Band, the Minister might also be familiar with the Tulla Céilí Band. The Tulla Pipe Band was honoured and delighted to accept the invitation to lead the St. Patrick's Day parade. This is taking place in the same year as the millennium Brian Ború celebrations and the celebration of the 125th anniversary of the Clare Association.
The reality, however, is that there is a significant cost - an estimated minimum of €50,000 - involved in taking a pipe band to New York. As the Minister is well aware, pipe bands do not have that type of money. Clare County Council, under the personal direction of Councillor Joe Arkins, who is doing a fine job as Mayor of Clare and who reflects traditional culture and values in his own voluntary contributions to Comhaltas Ceoltóirí Éireann and to Irish music in general, together with his colleague councillors from east Clare, has made between €10,000 and €15,000 available from a very tight budget to facilitate this trip. The Clare Association is also making a contribution, as are the members of the band. However, these combined contributions will fall somewhat short of the €50,000 that is required to allow the band to travel to New York.
This is a golden opportunity for partnership. Given the very difficult experience Clare has had in recent weeks as a consequence of the inclement weather and the job of repair that remains to be done, it would be an excellent partnership gesture from the Minister and from Culture Ireland were the latter to make a small financial contribution towards the cost of the Tulla Pipe Band going to New York for St. Patrick's Day. The band's participation would showcase what is good about the country and its culture and help to promote Ireland and Clare by showing the people of New York, the United States and the world the quality of music emanating from our shores. We in Clare have had a difficult three weeks and have received telephone calls and expressions of goodwill from all over the world. I ask the Minister to encourage Culture Ireland to make a financial contribution to enable the Tulla Pipe Band to make its trip to New York. That gesture of support would be well appreciated by all involved.
I thank the Senator for raising this matter on the Adjournment. I am familiar with the county associations in New York. The Clare Association is one of the most vibrant, with others representing the west coast, including the Kerry Association. I agree that this is a very important year for the Clare Association as it celebrates its 125th anniversary. It has made a major contribution to the lives of Irish people in New York, having assisted thousands of young Irish immigrants and made a major contribution to the promotion of Gaelic games and Irish music in that city.
The Culture Ireland division of my Department promotes Irish arts worldwide, creating and supporting opportunities for Irish artists and companies to present and promote their work at strategic international festivals and venues. This is achieved, inter alia, through a regular grant round scheme. The Culture Ireland expert advisory committee, at its most recent grant round in December 2013, considered applications for events in 2014, which included the St. Patrick's Day period. More than 270 applications were received, 48% of which were recommended for support. Unfortunately, the application referred to by the Senator was not recommended for funding.
To be eligible for funding, the primary purpose of the proposed international visit must be to present the work of Irish artists to a wide audience through performance or exhibition. The Culture Ireland division initially assesses the applications under the following criteria: quality of work and track record of the artist or company; level of geographic priority for the Government; profile of the international venue or festival; financial viability of the event, including the level of support from the presenter or other partners; proven capacity of the applicant to present work internationally; and any wider promotional and media impact. Culture Ireland, in considering applications, consults the embassy network in regard to the significance of the venue, likely impact of the event and any other local considerations before the applications are assessed by the expert advisory committee. The final recommendations are based on the extent to which the above criteria are met. Given the level of demand for Culture Ireland support, it is not possible to fund all eligible applications or even to fund all successful applications to the full level sought.
In regard to the specific application referred to by the Senator, the impact for the group had to be considered, given the number of other artists performing at the same St. Patrick's Day festival, as did the extent of support required in order to travel to the United Sates. It is a further consideration that where support is offered, it must deliver good value for money. Multiple venues and joined-up touring is encouraged, particularly where distant travel is proposed. This particular application was for only one event, at a time when there will be many competing demands for audience attention. I am happy to arrange for further feedback directly to the applicant if that is required.
Over the St. Patrick's Day period, the Culture Ireland division is supporting an increased number of events across the United Kingdom, Europe, the United States, Australia, Russia and China. Culture Ireland will work closely with other Departments and State agencies to maximise the impact of these events for the wider benefit of all concerned and will endeavour to enhance Ireland's strong global reputation at this key time, when there is a worldwide spotlight on Ireland's cultural and creative strengths abroad. I am sorry I do not have more positive news for the Senator. As I said, there has been a large number of applications. A céilí band from my own area applied for funding and was very disappointed when it was not successful. We are putting a major focus on St. Patrick's Day as an international day of Irish culture throughout the world. It provides a great opportunity to connect with communities throughout the world on an occasion when they receive a great deal of attention on a global scale. Our intention is to develop a theme around St. Patrick's Day as an international day of Irish culture. The Tulla Pipe Band might be lucky enough to receive funding in the future. In the meantime, it might be possible to identify other sources of funding for this year. I would be happy to have a chat about that with the Senator.
I thank the Minister for coming to take this matter and his comprehensive reply. I am concerned that the Tulla Pipe Band's application was not given comprehensive consideration in the context of the significance of the 125th anniversary of the Clare Association, which is in itself a banner event, and the tourism opportunity represented by the Brian Ború millennium celebrations, a national cultural event in 2014 in respect of which there is a strong east Clare connection. These factors were not considered by the adjudicating panel in reaching its decision. Is there any way the application might be reviewed by Culture Ireland if additional background information were to be submitted to Culture Ireland?
I remind the Senator that although Culture Ireland comes within the remit of my Department, it operates independently, with an independent panel charged with assessing applications. I do not direct the division on how it should dispense its allocation of funding. It operates, in effect, on the same arm's length principle, as does the Arts Council. Unfortunately, I was forced to reduce the funding allocation - it was a considerable reduction of some €700,000 - to Culture Ireland this year as a result of pressure from across the arts spectrum. Nevertheless, I will undertake to request Culture Ireland to review its decision in this case. I cannot, however, direct it on how to spend its allocation.
NAMA Debtors
I welcome the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy John Perry, and ask him to transmit my views on this matter which deeply concerns me to the Minister for Finance, Deputy Michael Noonan. I raise with the Minister for Finance, the Government and all my political colleagues the need for us, as a body politic, to react quickly and firmly to the suggestion that somehow we will go back on the word we gave the taxpayer at the time of the creation of the National Asset Management Agency that private arrangements would not be entered into where NAMA developers would be entitled to purchase back their loans at a discount. I would like to quote the final sentence of George Orwell's book, Animal Farm, because it is very pertinent to this debate. It reads: "The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which." I say to the Minister of State and the Cathaoirleach, on behalf of the taxpayer, that if we, politically, decide to go back on the commitment we gave to the taxpayer and re-enter into some cosy deal with NAMA developers, then the whole concept of political commitments and political promises will be totally irrelevant. The last general election and the change of Government will not have been worthwhile. That is at the very core of this debate.
The suggestion is now being made, whether on behalf of Government sources or developers, that we will rewrite history in regard to NAMA and give a new set of discounted deals to NAMA developers. The taxpayers, the very same people who footed the original bill, will foot the bill. I want a very firm and very quick commitment from the Government that no such plan is receiving serious consideration.
At the time of the creation of NAMA, which most of us supported as being the least worst option at its core were economics, politics and ethics. There was an economic requirement for it. From a political perspective, it was seen as perhaps the Government and the political establishment taking a hands-on approach to the devastated construction industry. From the perspective of ethics, it was presented as an arrangement which would be transparent and fair.
Questions are being asked about NAMA in this House and the Dáil, but the workings of NAMA and its transparency is a debate for another day. However, section 172 of the legislation absolutely prohibits the prospect of NAMA entering into what I would call discounted deals with the NAMA developers. That position must be maintained. The taxpayer, not some far away entity, has already paid €30 billion for the loans and the discount on those loans of €40 billion was taxpayer-funded. The taxpayer, therefore, has a huge interest in how NAMA operates and in ensuring it operates well.
We often hear about a functioning property market and somehow the story is spun that to have a functioning property market again, we must facilitate, in some special way, those who were in charge of what they previously deemed to have been a functioning property market. It was not, of course, a functioning property market but an entirely dysfunctional one based on grossly inflated values and grossly inflated egos. The last thing we want as a society, as a people and as an economy is to go back to those days. The people who speak about a functioning property market must recognise it will be a new place and will not be a return to what existed in the so-called Celtic tiger years.
We must ensure the commitment at the core of NAMA, which the taxpayer who was burdened with such debt was given, that there would be no discounted deals for developers is maintained. I look forward to the broader debate on NAMA, to the concept of it coming under the freedom of information legislation and to the very serious questions which have been raised in this House and elsewhere over the past number of months being articulated and answered. I also look forward with hope to a sense of decency and ethics remaining in this House, in this Government and in politics. I hope the commitment that we would not allow developers discounted deals is fully and strongly maintained.
If there is a further write-down for developers, what will be the arrangement for householders and the tens of thousands of people throughout the country with mortgage debt, credit card debt or with small business debt? How many people who have had difficulty with their financial affairs have been in receipt of salaries of up to €200,000 per annum to look after or get out of their debts? According to media reports, some NAMA developers have been in receipt of those sorts of salaries. If the payment of those sorts of salaries helps, in some way, to get some of the projects up and running, the proper management of mismanaged projects and a return to the taxpayer, that is fair enough but where is the salary for the man or woman who is trying to live on weekly budget and to pay a mortgage which might be out of control? Where is the salary for the small business person struggling against the odds? We need openness and transparency but, above all, we need fairness.
The country was brought to its knees by greed and by people who felt they lived outside the normal rules. The Government, to its credit, is trying to return this country to solvency and, I hope, in years to come, to prosperity but we must learn from past mistakes and recognise that one does not build an economy on a so-called property boom. The purpose of development, of housing estates and of a property market should be to provide homes for families and not to turn millionaires into billionaires. Will the Minister of State give a firm commitment that the Government will maintain the line, which its component parties certainly took during the initial debate on the NAMA legislation, that there will be no special arrangements for certain people and that section 172 will remain firmly part of the NAMA guidelines?
I convey the regrets of the Minister for Finance, Deputy Michael Noonan. He is on Government business but would be here otherwise.
As the Senator may be aware, section 172 of the NAMA Act precludes NAMA from selling loans or property to a defaulting debtor or to parties connected to a defaulting debtor. The Minister has no plans to amend this section. NAMA requires that the sale of all loans and of all properties and other assets securing these loans is conducted on a competitive, fully open market basis by suitably qualified sales agents. In all events, NAMA insists on independent valuations of all assets. NAMA also requires sales agents to prepare a final report and recommendation.
Included in these reports is a summary of the marketing campaign undertaken, a list of all parties who expressed interest in the loan or real estate or were contacted during the marketing campaign, a recommendation to accept the terms of the purchaser's offer as the best price reasonably obtainable, confirmation that the agent has reviewed the purchaser's confirmation relating to connected party sales, and a statement disclosing any commercial relationship between the agent, debtor, purchaser or purchaser's ultimate beneficial owners in the past five years and how any actual or perceived conflict of interest was managed during the sales process.
This process ensures all interested parties are given equal opportunity to bid for and purchase loans or properties sold by NAMA or by NAMA debtors and receivers. NAMA has adopted a very thorough approach in line with international best practice for the sale of loans, central to which is the open marketing of the loans to ensure competitiveness and transparency. For this purpose, panels of loan sale advisers have been selected through a public procurement process for each of the US and Europe. Where there are indications that a potential loan sale could be a feasible commercial option for NAMA relative to alternative options, an adviser from the relevant panel is selected by mini-tender to conduct the loan sale process, which includes the public marketing of the loans.
The adviser's role includes the preparation of a data room and the circulation of outline information to potential qualifying interested parties to generate as much competition as possible. The adviser assembles all relevant data relating to the loans, which are made available at the appropriate stage to credible potential purchasers who complete the necessary confidentiality agreements. The sale process is conducted on the basis of all parties having equal access to the necessary information at the same time to make fully informed bids, and NAMA will only approve a sale where it is satisfied the price obtainable represents the best possible return for taxpayers.
As part of the formal sales process, potential purchasers are required to provide an undertaking that they will not engage with the debtor or other obligors at any stage during the sales process without NAMA's pre-approval. Both debtors and potential purchasers are aware that the infringement of agreed protocols or undertakings may have an impact on NAMA's decisions as to whether, and to whom, it sells a particular portfolio. Where NAMA approves the sale of any loan or approves the sale of any secured property by a debtor, it requires a confirmation that the purchaser is not connected to the debtor or other obligors.
NAMA also requires sales agents to prepare a final report and recommendation. Included in these reports is a summary of the marketing campaign undertaken, a list of all parties who expressed interest in the loan or real estate or were contacted during the marketing campaign, a recommendation to accept the terms of the purchaser's offer as the best price reasonably obtainable, confirmation that the agent has reviewed the purchaser's confirmation relating to connected party sales, and a statement disclosing any commercial relationship between the agent, debtor, purchaser or purchaser's ultimate beneficial owners in the past five years and how any actual or perceived conflict of interest was managed during the sales process.
Since inception, NAMA has overseen the sale of €10.6 billion worth of loans, property and other assets held as security. To year end 2013, NAMA has completed loan sales, across the entire portfolio, with a par debt value of in excess of €4 billion. In this period NAMA has also sold more than 10,000 individual properties, mainly across Ireland and the UK. As the Minister has stated, NAMA will be reviewed this year and this issue may be considered within this review. However, the Government does not see the requirement for such a change to the legislation at this time.
The Seanad adjourned at 6.35 p.m. until 10.30 a.m. on Wednesday, 22 January 2014.