This article is from page 4 of the 2006-02-21 edition of The Clare People. OCR mistakes are to be expected so download the original SWF or the rendered page 4 JPG
SHANNON Development has faced a grilling before the Dáil’s finance watchdog committee over its handling of property deals.
Chief executive of the development body, Kevin Thompstone, admitted to members of the Public Accounts Committee that a report into its property management was “scathing” and had caused tension within the organisation.
The Controller and Auditor General (CAG), John Purcell, described plans to sell a site at Gillogue in County Clare in 2004 ,for €3.3 million as “extraordinary”, given that it was valued at €6 million in 1994.
Also under the microscope was the handling of 3.5 acres of land at the Ennis Road in Limerick.
Mr Thompstone said that although a report into Shannon Development’s property arm had been “scathing” and had caused some tensions in the organisation, a new property strategy was now been implemented.
The CAG’s report said that errors in transferring the Ennis Road property from the IDA to Shannon Development had resulted in Shannon Development controlling only half of the six-acre site, which was later sold on.
When the error was discovered and the transfer of the second three acres was completed, the site had become land-locked. It was later offered to a neighbouring landowner in 1998 for €254,000, but this was without seeking bids from others who had expressed an interest in the land.
The valuer used for the deal had previously underestimated the value of Shannon Development land.
The CAG’s report estimated that a decision not to sell the property by tender cost Shannon Development €150,000.
As regards the sale of the factory and 47 acres at Gillogue, the package was part of a 116-acre holding acquired in 1994 by Forfás for €6.35 million. But the CAG found that ten years later, Shannon Development proposed to sell 47 acres and the factory for about €3 million.
Shannon Development then offered the entire lot for sale for €3.3 million. In the end, the Development authority withdrew from the sale.
Mr Purcell expressed amazement that land might be sold for about half the original purchase price, after 10 years. He said that he “would like to bet on getting more than that on the market.”