A NUMBER of TDs yesterday expressed concern about the estimated €2.64 billion to be paid out in fees and expenses by the National Asset Management Agency (Nama) over its projected 10-year life.
Fine Gael finance spokesman Richard Bruton called for greater scrutiny on the likely expenses to be incurred. He said that the Nama draft business plan set out expenses of €240 million annually. “It offers no explanation of any great detail on that, except for the first three years,” he added.
Mr Bruton was speaking at the resumed meeting of the Dáil Committee on Finance and the Public Service, which is considering the committee stage of the Nama legislation. The committee, under the chairmanship of Fianna Fáil TD Michael Ahern, will meet again today.
All TDs are entitled to attend the debate, which is being held in the Dáil chamber, but only members of the committee can vote on amendments.
Minister for Finance Brian Lenihan said it would only be after the first year of Nama that its annual costs could be identified with complete certainty. “Nama acquires all the service-providers subject to the EU public procurement procedures, and the most economically advantageous tenders are chosen,” he added.
Labour finance spokeswoman Joan Burton said that if €100 million of the indicative fees of €240 million was going into the banks, that would leave €140 million annually for the various business houses. These would include auctioneers, valuers, accountants and lawyers. She said that most barristers and accountants would have “their mouths watering” at the thought of such an income coming their way.
Pat Rabbitte (Labour) warned that there was a potential for a conflict of interest, adding that the €2.64 billion involved was an awful lot of money. “We had a special budget last year for a smaller amount of money than that,” he added.
The main valuer, said Mr Rabbitte, was the person who until recently advised the developers, while the firm of solicitors had advised the developers over recent years. “They plead Chinese walls . . . some of them have so many Chinese walls that you can see rickshaws lined up at a distance,” he added.
Kieran O’Donnell (FG) said that people had grave misgivings about the level of expenses involved. Lucinda Creighton (FG) said there was a genuine concern about the potential for professional fees to grow out of control over Nama’s lifetime, with the possibility that it could become a gravy train for certain professions.
Frank Fahey (FF) said that at some stage the Dáil should get some indication of the fees paid to the banks. Mr Lenihan said he was essentially being asked to provide more information about a draft business plan for an entity which had not quite come into existence.
He agreed that while the current appetite for competitive tenders was overwhelming, that might not remain the case in a few years’ time.
“The fee levels are estimates,” said Mr Lenihan. “Anything after three years is almost impossible to predict with any certainty.” Currently, said Mr Lenihan, tender prices for fees were coming in very low.
Of the €240 million in estimated fees next year, most of it would be recovered from institutions as they related to due diligence costs which were estimated at €165 million at the time of the draft plan.
In fact, the Minister added, the latest estimates of cost would likely be closer to €100 million as a result of the outcome of EU competitive tendering which was under way.
