HQ rental cost of at least £115 million “plunges Invest NI into very murky water” – Sinn Féin

13 October, 2008


Invest NI's Belfast HQ will cost the public at least £115 million in rental payment over a 25-year Public Private Partnership (PPP) contract, Sinn Féin's Martina Anderson, MLA for Foyle, has confirmed using an Assembly Question.

Ms Anderson said the information "raises serious questions of public interest and plunges Invest NI into very murky water".

Ms Anderson said:

"Sinn Fein has been intensifying our investigations of Invest NI over the past year.

"It has now been confirmed that Invest NI's new headquarters at Bedford Street in Belfast - occupied from October 2005 - are being rented over a 25-year contractual lease at an estimated cost of at least £115 million to the public purse.

"However, the annual basic PFI rental combined with so-called 'related charges' stood at over £5 million per annum in both 2007 and 2008. If those figures are extrapolated over 25 years, then the total repayments for Beford Street will exceed £125 million.

"Signficantly the headquarters are not even regarded by Invest NI as a corporate 'asset' under the terms of the PPP contract. Nor does Invest NI present its basic headquarters rental cost in its annual accounts inclusive of VAT.

"Not only does all of this once again expose the fact that PPPs are generally inefficient and innappropriate. It also invites detailed scrutiny of the background to such lucrative public/private contracts.

"Recent Sinn Fein inquiries uncovered that Invest NI is continuing to pay £0.55 million annually for its two former headquarter buildings (Galwally House and LEDU House) - also in South Belfast - even though these were vacated with ten and four years still running on the respective contracts.

"Moreover, Invest NI has paid £569,000 rental since 2004 on empty office space at Waterfront Plaza in Belfast with a further eleven years to run on that contract. Invest NI has also paid £0.5 million rental on vacant office space at Campsie in Derry since 1992, with a further £0.5 million payout estimated over the final ten years of that contract until 2017.

"Yet despite entering a PPP contract costing anywhere between £115 and £125 for new partially-serviced premises and 'related charges' over a 25-year period, the estimated capital costs for Invest NI's new headquarters stand at just £25 million. What's more, Invest NI only occupies part of the Bedford Street property.

"In that context, all of this raises serious questions of public interest and plunges Invest NI into very murky water.

"I am once again calling for an immediate public inquiry into Invest NI. I am also bringing this latest information immediately to the attention of the Comptroller and Auditor General, John Dowdall, and the Chair of the Public Accounts Committee, Paul Maskey MLA.

"Sinn Fein is absolutely determined to challenge Invest NI's corporate mindset and to impose new high standards of corporate governance and new strong baselines of equality."

ENDS

Editor's Notes

  1. Under AQW 971/09, Martina Anderson, MLA, asked the Department of Enterprise, Trade and Investment to detail the precise terms and conditions, including payments to date, of the PPP contract for Invest NI's new headquarters at Bedford Street, Belfast.
  2. In its response, DETI stated that the PPP contract is "for the provision of fully serviced accommodation for the 25 year operational phase of the Project…. Within the contract certain additional services (e.g. hospitality, catering, additional file management) are paid for based on volume of usage". The financial cost of these "additional services" was not elaborated.
  3. DETI stated that the basic unitary rental payment rate is presently £4,337,573 per annum but this is also "subject to an annual increase based on the Retail Price Index figure for February each year…. For the period October 2005 - September 2008 the total of these fixed and variable elements is £12,921,852".
  4. Invest NI's annual report 2007/08 stated that the "Headquarters PFI service and related charges" for Bedford Street were £5.091 million in 2007 and £5.023 million in 2008.
  5. Based on these figures Sinn Féin conservatively estimates a total payment by Invest NI over 25 years of anywhere between £115 and £125 million.
  6. According to OFMdFM the estimated capital value of the new headquarters occupied by Invest NI stands at just £25 million (http://www.ofmdfmni.gov.uk/ppp-projects-awarded)
  7. During an Assembly debate on Tuesday 7 October 2008, Sinn Féin secured cross-party Assembly backing for the party's demand that new and innovative measures must be urgently developed and implemented to address regional investment inequalities.
  8. Over the past year Sinn Féin has been stepping up its calls for substantive inquiry reports into Invest NI by the Comptroller and Auditor General, as well as the Public Accounts Committee, across a range of issues including corporate governance and regional investment distribution.

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