PROPERTY DEVELOPER Niall Mellon, whose assets were moved into the National Asset Management Agency (Nama) earlier this year, has said he is confident his house-building charity will weather the recession following cutbacks over the past two years.
Hundreds of volunteers are expected to travel from Ireland to South Africa later this month for the latest “building blitz” organised by the Niall Mellon Township Trust.
Mr Mellon said his charity had cut its Dublin-based staff from 34 to 13, and halved the combined annual salaries of its five most senior executives, which had previously amounted to €442,000.
“We have already taken all the hard decisions. The charity is now in a very strong position to weather the Irish recession,” he said.
Mr Mellon confirmed that his assets had been moved into Nama. “After that we were asked to submit a very detailed and comprehensive report. We have done that and it is now in the process of being reviewed by Nama,” he said.
“It’s a strange feeling being in Nama. I saw a lot of the downturn coming, but I clearly didn’t see enough of it or I wouldn’t be in this situation.
“When you have a big portfolio, it takes years to sell. I sold a lot of my property in 2006/2007 but not enough for me to escape Nama,” he said.
“My portfolio was able to withstand a drop of up to 50 per cent in value but what has happened is so extreme that I am now below water.”
Mr Mellon recalled that when he launched the Meridian Quay development in Swansea in 2007, he decided to ban Irish investors from buying. “I told people openly that I believed Irish investor expectation was too high and there would be serious problems. I didn’t believe Irish people would be able to complete the purchase by the time the development would be finished. People thought I was crazy but that was our policy – we didn’t sell a single unit to an Irish person.”
Mr Mellon, who last month put his 242-acre Kilkenny estate on the market, admitted the past two years had presented huge personal challenges.
“It has been an economic war of sorts. My priority has been to try to provide for my family and to be as responsible as I possibly can with my business assets to mitigate any loss to the banks or now, ultimately, the State,” he said. “I can give a blanket guarantee, however, that no matter what my personal financial situation, I will never take one euro of a salary for my position as the voluntary chief executive of my charity.”
Despite the impact of Ireland’s economic crisis, Mr Mellon said the charity had enlisted almost 750 volunteers this year, each of whom will have raised €4,000-€5,000 to take part in house building. “This year has been a test for us. Many people are at their wits’ end simply trying to cope with existing in Ireland, never mind donating money, but the number of volunteers is staggering. It is a testament to the generosity of Irish people.”
In the past, one of the charity’s high-profile backers was former Anglo Irish Bank chairman Seán FitzPatrick. “I am as proud that Seán FitzPatrick came out [to South Africa] to work with me as I am of any other volunteer,” Mr Mellon said. “I’m not God – I’m not sitting here to judge people. I am very appreciative of anyone who has given me a week of their time.”
Mr Mellon rejected concerns, aired in an Irish Aid monitoring report last year, that his charity might be crowding out local subcontractors in South Africa.
“As we have expanded our programme, this is something I have kept a watchful eye over to make sure it doesn’t happen.
“At the current level we are at, I don’t think there is any danger of us remotely squeezing out the emerging sub-contracting market.”
He also dismissed criticism that the charity’s work is more about “volunteer tourism” than addressing, in a sustainable way, long-term development goals and skills transfer.
“I am still surprised that people ask this when my mission has always been a very simple, clear one – to help play a part in giving families a decent roof over their heads,” he said.
“We have over 200 staff [in South Africa] and we generate approximately 1,800 other jobs all year round for locals. Including myself there is only one other Irish person in South Africa, so in terms of local employment and skills, it doesn’t get much better than that.”
Plans to expand the house-building programme to other parts of Africa have been put on hold due to the recession.