State Property.

Dáil Éireann Debate, Tuesday - 27 April 2004

Tuesday, 27 April 2004

Ceisteanna (33)

Fergus O'Dowd

Ceist:

96 Mr. O’Dowd asked the Minister for Community, Rural and Gaeltacht Affairs if he has satisfied himself following the controversial circumstances around the sale of a holiday home complex in Connemara by Údarás na Gaeltachta, that measures have been put in place which will prevent this from recurring in the sale of other Údarás properties; and if similar deficient processes have not occurred during the sale of other Údarás properties in the recent past. [12131/04]

Freagraí ó Béal (10 píosaí cainte)

Minister for Community, Rural and Gaeltacht Affairs (Éamon Ó Cuív)

Section 8 of the Údarás na Gaeltachta Act 1979 sets out the functions of Údarás and specifies at subsection 8(7) "For the purposes of this section, an tÚdarás shall have power to acquire, receive on transfer, hold, sell, mortgage, lease, let or otherwise dispose of land, buildings, markets, premises or plant and to erect, alter or maintain buildings, markets, premises or plant."

The responsibility for the disposal of Údarás property, therefore, is a matter for the board of Údarás na Gaeltachta, in accordance with relevant State and EU guidelines and directives, which include the public procurement guidelines (1994) and the code of practice for the governance of State bodies (2001).

I have no function in regard to individual cases. However, I understand from Údarás na Gaeltachta that the board has set aside its earlier proposals of sale in regard to "Tithe Saoire Eanach Mheáin" following advice from senior counsel on rules pertaining to State aid. My responsibility as Minister is to ensure that the relevant guidelines and directives are adhered to and that best practice prevails. My officials liaise with the Údarás executive on an ongoing basis in this regard. In this case, and on foot of reports which have been received from Údarás, my officials are examining, within the framework of corporate governance arrangements, the processes and procedure which applied.

Mr. O’Dowd

The sale of property owned by Údarás na Gaeltachta takes place directly on the Minister's instructions. He has asked Údarás to sell property worth €20 million over the next few years, while in the current year, property worth more than €7 million will be sold. Surely it is a matter for the Minister, having directed the board to sell its property, to insist on new criteria being introduced to Údarás, on the basis that the board — not the officials — proposed to accept the third lowest tender. Three tenders went before the board, the lowest of which was recommended. Did the Minister ask for a report on this sale? Did it make clear that there was a document outlining the business proposal contained in the third tender, the one accepted by the board? I understand that no such document was available on the day, yet the board moved ahead on the sale of the property.

Éamon Ó Cuív

I did not instruct the board of Údarás to sell any particular properties. I never give any direct instruction to Údarás to sell property. There were discussions between myself and Údarás na Gaeltachta because it said it did not have enough money for its capital programme. Discussions were held on the possibility of raising money through the sale of properties. We also had a number of studies carried out on the issue. In general terms, it is my obligation as Minister to ensure that the assets of the Údarás are used in the best interests of the people of the Gaeltacht. Under the Act, the responsibility in the case of any property the board sells, the choice to sell or not to sell, and the procedure it followed, are those of Údarás na Gaeltachta, as clearly laid out in the Act.

Mr. O’Dowd

The Minister proposes to bring in a new Bill to amend the operation of Údarás na Gaeltachta in the year 2005. Will he bring in such a Bill immediately? On this side of the House we will facilitate such a change, because operations at the Údarás must change urgently. There should be a scheme of marking when proposals are brought before the board, to denote interest in the Irish language and business plans related to the Irish language. The Minister cannot deny that his office is ordering the board to sell its property. The board did not come up with this plan on its own. Is the Minister insisting that the Údarás budget be cut, and that the shortfall be met by the fire sale of its properties? Is this the worst possible time to do this, when transparent criteria are not in place, with the public not aware of what is going on? Does the Minister think the public should be so aware?

Éamon Ó Cuív

There are very clear criteria involved in this issue. They include the Public Procurement Guidelines 1994 and the Code of Practice for the Governance of State Bodies 2001. Many State bodies buy and sell property. For years Údarás na Gaeltachta has been in the business of both buying and selling State property. My role is to make sure that best practice is followed——

Mr. O’Dowd

Exactly. Is it being followed?

An Ceann Comhairle

Please, Deputy, allow the Minister to continue.

Éamon Ó Cuív

——by Údarás na Gaeltachta in the sale of any particular property. In this case — we have to be very careful here — the sale has not gone ahead. That is public knowledge because the board decided, on legal advice, that the procedures it had followed, specifically relating to State aids, was not compatible with good practice. It aborted the sale, therefore, and it is my understanding that the property might be put back on the market again. In those circumstances it would be inappropriate for me to comment on the details of any tenders made because further bids could be made.

One of the unfortunate aspects of this matter is the innocent parties, so to speak, the people who in good faith put in their tenders and provided what would normally be considered, in a tender process, confidential information before that process has been completed. The problem is that they have had details of their tenders put into the public domain. If the process was completed all the information would have to be made available but, as the Deputy is aware, where a process is not completed a certain amount of discretion is afforded because of good procedure.

I stress once again that there is an absolute obligation on Údarás — I have made this clear — to use the property portfolio to the best advantage of the people of the Gaeltacht. If Údarás is using the revenue raised from the sale of certain properties to provide other properties or it disposes of certain properties — Údarás has always had that policy and has disposed of certain properties — it is wise for it to do that. There is no doubt — we did studies on this — that I have encouraged Údarás to be much more proactive in ensuring best value for money from its extensive property portfolio, which runs to well over €100 million. That is something on which all of us in this House would agree.

Mr. O’Dowd

My question is very simple. Was best practice followed in this case? If it was not, and nobody can argue that it was, how can the Minister ensure best practice will be followed from now on? If that means he has to introduce legislation to change the way the board operates, will he not do that? That is the key issue. The innocent people in all this are the taxpayers because they are not getting the best value for their money.

Éamon Ó Cuív

My obligation is to make sure that best practice is followed. The primary obligation, however, is on Údarás to ensure it follows best practice because they are the people doing the selling. In this case, as the Deputy is aware because it is on public record, there was a problem in regard to State aids and for that reason they have not proceeded with the sale. The Deputy can take it that there was a flaw in the process. That is public knowledge. They aborted the sale. My officials have been in constant contact with Údarás on the basis that the next time it proceeds to sell this or any other property it must ensure that best practice is followed.

In regard to changing the law, there are many State agencies — Údarás is not unique in this respect — which can buy and sell property. I believe there would be major resistance in this House if the sale of particular properties became a ministerial function. It would be a drastic step to take the power away from Údarás and not from any other State agency to buy and sell property and vest that power in the Minister. If I attempted to do that, the Deputy would be quickly on his feet to tell me there was undue interference by the Minister in the day-to-day affairs of Údarás na Gaeltachta.