Business And Leadership, Ireland's Business News Service

The authority also reported a loss of €27m for 2008, compared to the profit of €3m it reported in 2007.

2008’s annual loss, combined with the property impairment charges, means the DDDA is reporting a total deficit for 2008 of €213m, which is the biggest ever reported in the history of its operations.

The annual report also revealed the extent of the impairment charges the DDDA has had to absorb in 2008. While some €67.8m of the charges relate to impairment of property assets, a further €117.8m relates to the authority’s 26pc stake in a company called Becbay Ltd, which purchased the controversial Irish Glass Bottle in Ringsend, Dublin.

The DDDA reports says it had the Irish Glass Bottle site independently valued and as of 31 December 2008 it was worth €50m, which is a massive fall in value on the €412m originally paid for it.

An ‘exceptionally’ difficult year
Commenting on the 2008 report, the DDDA Chairman Professor Niamh Brennan (pictured), who was appointed to the position in March of this year, said the collapse of the Irish property market during 2008, and with it the value of the assets held by the Docklands Authority, has posed huge problems for the organisation. 

Describing 2008 as “an exceptionally difficult year”, Brennan said the DDDA now has to adjust to what is essentially a “new business model … which will result in a more conservative approach to progressing our mandate resulting in a delay in completion of many projects and cancellation of some programmes”.

Brennan also confirmed today that as a result of the adverse ruling in the High Court Case against the DDDA over the use of its statutory planning powers, and a request from the Minister for the Environment, Heritage and Local Government John Gormley TD, the DDDA Executive Board has initiated a number of reviews of practices, policies and procedures to ensure that the authority is “fit for purpose and that it abides by best practice in respect of corporate governance and all aspects of its operations”. 

Brennan stressed that there was no room for compromise or ambiguity in respect of this issue.

Public confidence undermined
The DDDA Chairman also acknowledged that public confidence in the authority had been seriously undermined in recent months: “The authority has transformed the Docklands over the past decade. While I recognise these significant achievements, past successes may count for little unless we robustly address current challenges and stabilise the authority such that it can continue its mission to regenerate the Docklands area.

“Our objectives as a board are twofold; to restore our financial position and to restore public confidence in our operations.  Both are possible but they will require hard work, tough decisions and the transparent pursuit of any wrongdoing that comes to light.  We will not hesitate in respect of any of these challenges.”

Will need taxpayer support
According to Brennan, the DDDA has already taken steps to address the dire financial situation it now finds itself in.

In respect of operating costs, it is estimated that the deficit the authority will record this year will be “substantially” lower than in 2008. And in respect of impairments and writedowns on property assets, Brennan said the DDDA had taken “an exceptionally aggressive” approach to writedowns on property assets in 2008: “The board was of the view that there was no point in waiting to deliver more bad news on this front in six or 12 months time and took a very aggressive approach to writedowns in 2008 so that the authority will not be effected by such levels of impairment in future years.”

However, despite the initiative taken by the DDDA on financial matters, Brennan indicated today that the authority will still require taxpayer money to survive: ““Despite the steps we’re taking, the situation is clearly very serious.  However, with financial support from the Government and with a radically different approach to the job in hand, the board believes that the project can be restored to financial health and our mandate completed.”