A site of 32 acres of prime development land in Dublin's Docklands is at the centre of claims of sweetheart deals and non-adherence to tendering procedures. Frank McDonald investigates
Mystery still surrounds the nature of a deal done by Dublin Port Company (DPC) with a group of developers to facilitate their attempt to build the long-delayed National Conference Centre. Indeed, even some members of the port company's board are at sea over what precisely was agreed with the Anna Livia consortium.
The consortium was given a foothold on a site of 32 acres between East Wall Road and Alexandra Basin, which would form a natural extension to the Docklands area - "the hottest property market in Europe", as one leading developer described it - at a price which has not been disclosed publicly.
If the price was less than its market value - which could be at least €15 million per acre - the deal would have enabled Anna Livia to tender an offer to build the conference centre at a lower cost to the Exchequer than the price quoted by its rival, a consortium led by Treasury Holdings.
Anna Livia was formed by Bennett Construction, long-established builders with headquarters in Mullingar, Co Westmeath; Earlsfort Centre (Developments), controlled by the Gallagher family, which developed the East Point business park; and Kilsaran Concrete, based in Dunboyne, Co Meath.
One member of DPC's board said it was his understanding that the deal only involved four acres of land, rather than 32 acres. However, he added that the board had been told "as little as we needed to know" by its chairman, Joe Burke, and chief executive, Enda Connellan.
In a statement, the company said that it "has, to the extent relevant to date, acted in compliance with the applicable public procurement legislation and the code of practice for the governance of State bodies. Pending the outcome of the Attorney General's review it would be inappropriate ... to make any further comment".
Public procurement guidelines, adopted in 2001, enshrine the principle that competitive tendering should always be used by public bodies in awarding contracts worth more than €70,000 unless exceptional circumstances apply - for example, the sale of land to a charitable body.
The code of practice for State bodies says: "It should be standard practice that the disposal of assets of State bodies or the granting of access to property or infrastructure for commercial arrangements, eg joint ventures with third parties ... should be by auction or competitive tendering."
According to the code, the method used "should be both transparent and likely to achieve a fair market-related price". And while ports such as Dublin are now run by State-owned private companies, they were all required by the Minister for the Marine to be bound by the rules on public procurement.
It has been Government policy since 1989 to procure a National Conference Centre (NCC) in Dublin. After three abortive tenders, Fianna Fáil and the Progressive Democrats pledged in their June 2002 Programme for Government to "ensure the construction of a state-of-the-art NCC".
In November 2003, the Office of Public Works invited expressions of interest from developers in "the provision of a National Conference Centre in the Dublin area with an expected minimum delegate capacity of the order of 2,000" and a stated delivery date of December 31st, 2007 - a deadline that has since been dropped.
By July 2004, three candidates had been shortlisted for the "design, build, finance, operate and maintain" contract - the Anna Livia consortium on Dublin Port land, developer Bernard McNamara on Leopardstown Racecourse and a consortium involving Treasury Holdings, Harry Crosbie and CIÉ at Spencer Dock.
Mr McNamara subsequently withdrew, leaving the field to just two contenders - Anna Livia and Spencer Dock International Conference Centre Ltd (SDICC).
They were both issued with tender documents in December 2004, with a closing date of March 18th last - later extended to noon on May 20th.
The scheme for Spencer Dock was the brainchild of Kevin Roche, the renowned Irish-born architect based in the US, while Anna Livia's project was designed by RKD Architects in association with Larry Oltman, who was the principal architect for Hong Kong's spectacular convention centre, completed in 1997.
SDICC was intrigued to find out how its rivals had managed to gain a foothold in the port, and last January Whitney Moore solicitors wrote to DPC's chairman, Joe Burke, saying they had a client who would be interested in bidding for the site off East Wall Road and wanted further details about its availability.
The solicitors, who did not identify this client, were told by Mr Burke that their interest in the site had been "noted". He also stated that Dublin Port was "aware of its obligations under public procurement law where applicable and is also aware of the relevant Government guidelines for the disposal of State assets".
On April 1st, after receiving a press query, the Department of the Marine requested DPC to provide relevant information on the deal. It was informed six days later that the company had entered into "non-binding heads of agreement" with Anna Livia, to facilitate its bid to develop the NCC on port lands.
In mid-April, SDICC wrote to Kevin Connolly, head of special projects at the OPW, querying how its rivals could deliver title to the site - as they were required to do under the terms of the NCC tender - when it "can only be available after DPC has complied with its voluntary adherence to the State public procurement rules".
SDICC's letter noted that another condition of the tender was that bidders had to show that their chosen sites complied with "accepted proper planning and development principles, as described in the relevant planning authority's development plan" and said it was "difficult to see" how Anna Livia had so complied.
It pointed out that the zoning of the site for "port-related industries and facilities" could only be changed if Dublin City Council adopted a material contravention of the city development plan and said the OPW could not "second-guess the probability of elected members invoking such a procedure and/or voting in favour of it".
On April 19th, John Moran of Manor Park Homes wrote to DPC's chief executive, Enda Connellan, saying they would be "very interested in acquiring, leasing and/or joint venturing with the port" on the East Wall Road site. Had the company been aware of its availability, he said it would have tendered for the NCC on that basis.
By then, it had become clear to SDICC that even if the Anna Livia consortium ended up as the "preferred bidder" for the NCC, public procurement rules would require Dublin Port to advertise the site for sale and pick the best tender. Thus, there was "no certainty" that Anna Livia could deliver title to the site.
Richard Barrett, a director of Treasury Holdings, briefed Fine Gael frontbencher Jim O'Keeffe TD. He told Mr O'Keeffe that even if Anna Livia won the NCC tender, DPC would have to put the site up for sale, with the result that it could be "left with no site and, despite winning the NCC tender, Ireland gets no NCC!".
Mr O'Keeffe tabled a Dáil question to Pat "The Cope" Gallagher, Minister of State at the Department of the Marine, who responded in a written reply on May 17th that DPC had informed the Department that it had "not concluded any agreement for the disposal of company assets" with the Anna Livia consortium.
Mr Gallagher expanded on this in reply to further queries from Mr O'Keeffe on May 31st. He revealed that DPC had requested ministerial approval for its proposed arrangement with Anna Livia, whereby it would "make available a site" for the NCC "together with further and complementary commercial development".
SDICC's response was swift. Whitney Moore solicitors wrote to members of DPC's board at their home addresses that evening describing the deal with Anna Livia as "a private arrangement negotiated behind closed doors" which did not comply with public procurement rules or the code of practice for State bodies.
"There are very many developers in Dublin who would jump at the chance of being involved, yet they have been denied that chance by the decision to negotiate privately," the letter said. "It would appear that the port proposes to dispose of the site not by public tender, not giving a party whose interest had been noted a chance to bid."
On the following day, SDICC project manager Dermod Dwyer wrote again to Kevin Connolly - this time saying that the OPW had "no choice but to disqualify" Anna Livia's tender. If that didn't happen, SDICC would have no alternative but to "explore other avenues" to ensure that the rules of the tender were properly applied.
In a briefing paper, SDICC told Jim O'Keeffe that the OPW "can only have taken the view that the Anna Livia consortium was in a position to ensure 'deliverability of title' if it was prepared to disregard entirely the obligation of DPC to comply with the public procurement obligations". It was, therefore, "acting unreasonably".
Mr O'Keeffe took the matter up again in a Dáil adjournment debate on June 28th. He described DPC's arrangement with Anna Livia as "a sweetheart deal, possibly of the Galway races tent variety, since the principals on both sides are well-known Fianna Fáil supporters", over land that could be worth €20 million or €30 million per acre.
Pat "The Cope" Gallagher denied this, assuring Mr O'Keeffe that the matter "will be dealt with in an open and transparent manner". Following consultations between the Department of the Marine and the Department of Finance on whether it was in line with public procurement rules, the Attorney General's advice was sought.
Meanwhile, Whitney Moore solicitors were told by Michael Sheary, DPC's secretary, that the port company "cannot make any assessment of any possible interest on your client's part if it does not declare itself"; any offer "will receive fair consideration provided that it does not conflict with any arrangements already concluded".
Shortly afterwards, DPC's Enda Connellan got a letter from Agar estate agents saying they represented a "well-respected cash-rich developer who would like exposure to the tremendously vibrant Docklands market, where he is currently under-represented" and was prepared to bid €15 million an acre for the East Wall Road site.
Mr Connellan replied that DPC's arrangement with Anna Livia was "not a straightforward site sale but is contingent on the NCC being located here".
But Mr Sheary told Whitney Moore that "the sale of the site" was awaiting approval from the Minister and, subject to that, DPC had "agreed to transfer" it to "another party".
The Attorney General, Rory Brady SC, has now completed his examination of the deal and reported back. The Department of the Marine would only say his advice was now being considered, while the OPW said the whole issue of the NCC tender was at a "very sensitive stage" and it would rather not say anything more about it.
Matt Gallagher, one of the leading figures in the Anna Livia consortium, told The Irish Times last week that its deal with DPC was "straight, above board and was done with legal advice on both sides".
He regretted that Anna Livia had been unable to respond in detail to media reports, some of which had been "quite hurtful".
Asked if it was a "sweetheart deal", Mr Gallagher said: "I can tell you this much - sweetheart deal it ain't."
He would not comment on whether the site was to be acquired at a knockdown price. "If we win the tender for the conference centre, it will all come out in the wash." He also did not anticipate any planning difficulties.
There is some irony in all of this. Back in 1998, before the current public procurement rules were adopted, Treasury Holdings did a private deal with CIÉ to secure the rights to develop the NCC on its 51-acre site at Spencer Dock. The site is currently being developed in part for offices and apartments, including some social housing.