If further proof were necessary of the shambles that has become of the Dublin Docklands Development Authority (DDDA), a telling line in the report into the DDDA's financial controls by independent consultant Ray King regarding the state's involvement in the purchase of the former Irish Glass Bottle site in Ringsend gives some indication of the mess the body now finds itself in.
According to the final report from King, it still remains unclear from the shareholders' agreement between the DDDA and its other partners in the Becbay consortium that bought the site for €413m in 2006 just what the exact contribution the authority would end up making was. King says the DDDA was committing €32.8m for a 26% stake in Becbay and would cap its overall investment in the deal at €35m. In the end it spent a lot more than that, making loans available to the company to help it meet interest payments on the debt it was taking on to buy the site, up to as much as €47m.
So either the DDDA incorrectly interpreted the shareholders' agreement it had drawn up with its business partners on the site (the developer Bernard McNamara) and spent more than it should have or it should have restricted its total investment in Becbay to €35m, King reported.
"Only the people involved in the decision making or negotiations involved in this joint venture can state which of the two conclusions is correct," King stated.
Given what we now know about the running of the DDDA it may seem a small point, but as it stands experts sent in to scrutinise an agency spending ten of millions of euro of taxpayers' money still can't get to the bottom of the deal that brought the authority to the brink of collapse.
Anyone wandering through the docklands, and particularly the area surrounding the shiny Grand Canal Theatre or the soon-to-be-opened Convention Centre, couldn't but be impressed with the redevelopment that has taken place in the 13 years since the agency was set up.
But the official release of King's report and another by planning expert Declan Brassil, finally published by environment minister John Gormley last week, takes the gloss off the authority's success in its mission to revamp the area.
Conflicts of interest were rife at the authority. Directors were stepping in and out of board meetings like Lanigan's ball. Disgraced former Anglo Irish Bank chief Sean FitzPatrick was a director of the DDDA at the time Becbay took out a loan from the bank to buy the Irish Glass Bottle site. The then chairman of the DDDA, Lar Bradshaw, was a director of the bank and co-investor in a number of personal deals with FitzPatrick.
No formal valuation was put on the site; the largest was done by the DDDA, though an "informal valuation" was referred to at one board meeting, King found.
Brassil's report found that in the last few years before the board clear-out and the appointment of corporate governance expert Niamh Brennan as chairman, it placed its development function before its role as a planning authority. As an example, the report highlighted the awarding of permission to the now failed developer Liam Carroll to build a new headquarters on North Wall Quay.
The High Court ruled that the DDDA acted outside of its powers when fast-tracking Carroll's planning permission.
Aside from the Irish Glass Bottle debacle, King found other worrying issues at the DDDA. He couldn't determine whether it followed public procurement guidelines because of the "absence of so much documentation".
Moreover, the financial performance for 2010 is dependent on a payment due to the authority of €20m in September 2010, according to a report by the executive board.
In addition, the DDDA is owed over €8m in levies and, as first reported in the Sunday Tribune, it has had to appoint debt-collection services to pursue the unpaid debts. On top of this is the annual interest bill of €5m for the Irish Glass Bottle site, making the DDDA "incapable of operating on a break-even basis", according to the report.
The upshot is that the authority may come under pressure to exceed its borrowing limits of €127m and that's where the taxpayer comes in. The state may have to pump money into a body that is running at a significant annual loss and where there is little hope of the money being recouped.
Gormley says he is in favour of allowing the authority to continue its "valuable work of regenerating the docklands area and supporting key community and educational initiatives", though it will have to come under the oversight of the state's powerful enforcer, the Comptroller & Auditor General.
Brennan, the straight-talking UCD professor, insists that things have changed at the authority and that taxpayers may recoup some of their investment.
The loan that funded the purchase of the Irish Glass Bottle site was one of the first that moved from Anglo Irish Bank to Nama. The toxic debt agency will now have to decide what to do with it. It is clear that the original plans by Becbay will never see the light of day. As Nama paid substantially less than the €413m shelled out by Becbay it could probably make a small profit by sticking up only 100 houses on the site. Small comfort given the cash the exchequer will have to spend to keep the DDDA afloat. (additional reporting by Neil Callanan)