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No money for jobs but NAMA borrows to help construction industry abroad – Doherty

16 February, 2012 - by Pearse Doherty TD

Sinn Fein Finance Spokesperson Pearse Doherty has called on the Government to respond to the charge that Irish money is being used to drive the British economy. Doherty made the charge after discovering that NAMA will be advancing €568.2 million to construction activity outside of Ireland. Of this €568.2 million, €444 million has already been handed over.

Deputy Doherty put the charge to the Government after his colleague and party leader Gerry Adams received a geographical breakdown of where NAMA advances to help developers finish projects are being spent. Doherty said that while 66% of NAMA’s assets were in the 26 Counties, only 41% of its cash advances so far are being spent in this jurisdiction, whereas 50% will be spent in Britain.

Doherty said:

“We have almost 440,000 people on the live register in this state. A large section of this group are unemployed construction workers, tradesmen and associated professions. Nobody wants to revisit the property bubble, but it is clear that there is a mountain of unfinished infrastructure in this state, as well as desperately needed critical infrastructure. In our pre-budget 2012 submission, we called for a Government funded stimulus, paid for from the NPRF and EIB, to build necessary infrastructure and undertake projects such as converting suitable NAMA properties for social housing need.

“The Government continuously claims it has no money to initiate this sort of stimulus, yet we know that NAMA as an off-general-government balance sheet vehicle can borrow money to advance to developers to finish projects, and does so. My party was curious to see how this money was being spent and it transpires that over half of it is being spent outside of Ireland, despite two thirds of NAMA assets being situated in the 26 Counties.

“NAMA might contest that property abroad holds more value at this point in time, but the proportion of spend verses what is currently on its 26 Counties books doesn’t stack up. We need to know what developments this money is being spent on; what the decision process consists of in allocating the cash advances; and why Irish developments are receiving less cash for finishing projects.

“I am also asking the Government whether it believes that money being procured by NAMA on behalf of the Irish state would not be better spent in the Irish state. Given that all and any of the properties finished, whether here or abroad, are being sold at firesale values, would it not be better that at the very least the money was creating jobs in the 26 Counties? Under the Act, NAMA can issue €5 billion worth of debt securities for its general operations – that is, to meet new lending and working capital commitments, so what we’re looking at here may only be the start in terms of NAMA eventual lending to developers.”

Breakdown of NAMA payments:

To ask NAMA to provide a geographical analysis of their advances to developers, both approved advances and actual cash advances, to include Ireland, the North and Britain – Gerry Adams TD

New Advance Approvals of €980m are split between;
• Ireland (41%)
• Northern Ireland (1%)
• United Kingdom (50%)
• Other locations (8%)

Drawdown payments of €740m are split between;
• Ireland (39%)
• Northern Ireland (1%)
• United Kingdom (52%)
• Other locations (8%)

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