The practice of property under the control of NAMA being sold in an ‘off market’ manner requires detailed scrutiny to ensure that maximum value is being achieved for the taxpayer and the State, according to Fianna Fáil Spokesperson on Finance Michael McGrath.
Deputy McGrath was commenting after receiving a parliamentary reply from Minister Michael Noonan confirming that NAMA has approved 240 sales involving ‘open marketing exceptions’ since January 2014 with a value of €1.2 billion. €800m of this €1.2bn relate to sales to private parties where NAMA says ‘open marketing was not pursued for legal reasons or because a better return was achieved through an alternative disposal mechanism’.
“Where assets, effectively under the control of NAMA, are sold on an ‘off market’ basis and every possible interested party is not given an opportunity to bid in a competitive process, it is impossible to know definitively whether the best possible price has been achieved for the State. When sales are non-competitive in nature, NAMA is relying on market valuations to satisfy itself that value has been achieved. Valuations are, by their very nature, subjective and do not always reflect the price achieved in the market.
“While I can understand NAMA approving ‘off market’ sales to other public bodies in the public interest, it is more difficult to understand the reasons behind the other 126 ‘off market’ sales to private parties since 2014 with a value of €795m. Given that NAMA only began in 2014 to log sales that have been completed in this manner, it raises a question as to how many non-competitive sales occurred up to the end of 2013.
“I understand that the Comptroller and Auditor General is currently working on a Section 226 review of NAMA for the three years to 31 December 2015 and I would imagine this disposal policy will be an area of interest in that report.
“The key issue is whether NAMA, by approving a certain number of non-competitive sales, has pursued the right policy to deliver maximum return for the State. The Comptroller & Auditor General is best placed to make that judgment and I hope it will be addressed in the forthcoming report,” concluded McGrath.