The Minister for Justice rejected a claim that the Government had paid an inflated price for the €29.9 million site acquired in north Dublin for a new prison.
Mr McDowell said that a series of advertisements was placed in the national media and the committee choosing the site considered all the offers made.
"Many of those involved substantially higher sums of money per acre than that being asked in respect of the site in question.
"Bearing in mind that the site is located in the greater Dublin area and has a substantial expectation value in terms of development, when the prison is completed the price of the land will form only a small and reasonable portion of the expense attaching to the entire operation."
The price paid for the site at Thornton Hall, The Ward, was challenged by the Labour justice spokesman, Mr Joe Costello, who claimed it had been bought "hook, line and sinker for 10 times the normal market value".
Asked by Mr Costello if he would meet the local residents, Mr McDowell said he had made several efforts to do so but the arranged meetings had been postponed at their request. He said Mr Costello had a consistent policy that Mountjoy Prison should remain where it was.
"I am not willing to waste €400 million on a development to provide an inadequate prison," he said.
