The State may have lost out on around €150,000 in potential proceeds from the sale of land in Limerick, the Comptroller and Auditor General has found.
In a value-for-money report released yesterday, the Comptroller criticised Shannon Development for disposing of the property at Ennis Road in Limerick without going through an open tender process. The property involved was a 3.5 acre plot of land which had been transferred to Shannon Development by IDA Ireland in 1988.
However, the report says that Shannon Development did not realise the land had been transferred to it "until it fortuitously came to light in 1997".
It says that the failure of the State agencies to protect the title to the land resulted in encroachment and that a building company had used the land to dump spoil. This company had claimed ownership of the site by way of adverse possession. However it withdrew this case prior to a High Court hearing.
The report states that Shannon Development sold the site in May 1998 to the owner of an adjoining factory site for €254,000 without going through a competitive process. It says that no evidence was provided to indicate that there had been any negotiations about the price. Neither was there any evidence provided to indicate that discussions had been held with any of the owners of other adjoining properties.
The report maintains that the sale price was in line with an independent valuation commissioned by the Comptroller. "However, if title had been established and protected, additional proceeds of around €150,000 in 1996 prices might have been achieved.
Accordingly, the method of disposal may have reduced the potential proceeds from the sale of these assets by around €150,000", the report states.
The report maintains that "where an industrial development agency is concerned, good practice would dictate that in order to achieve the best price reasonably obtainable, surplus property should be sold through an open market process and property for industrial development sold with a covenant restricting its use to that purpose".
