Potential NAMA liabilities need to be taken seriously – Doherty
Responding to the publication of the NAMA annual accounts today, Sinn Féin finance spokesperson, Pearse Doherty TD, said that given the potential liability to the state from NAMA, the government should be raising it at the negotiations around banking debt in Europe. He said today's profit was against a backdrop of a loss of €1.1 billion in 2010 and also seemed to come largely from tax credits according to blog speculations. He added that more transparency is needed from the organisation and the Government on its operations.
Deputy Doherty said:
“When NAMA acquired its original €74 billion worth of loans, it did so for €32 billion. It is now reckoned that on the open market those loans are worth €26 billion. By 2020, NAMA has to ensure that the bonds it used to buy these loans are redeemed in full and there is no guarantee that the agency is going to break even.
“In the face of this, it is beyond belief that this government has not seen fit to raise the issue of NAMA at the negotiations around banking debt in Europe. This was confirmed to me in a parliamentary question response from Minister Noonan last week. The headline today is about NAMA making a profit, but this compares with a loss of €1.1 billion in 2010.
“Much of this profit seems to come from a tax credit, according to blog speculation, but I have yet to study the accounts in detail. I would have queries around NAMA's accounting practices, specifically how they calculate future interest received and how they are estimating the fair value of their loans.
“The publication of the NAMA annual accounts today is welcome, because it shines a light on the operations of this organisation which the public know little or nothing about. There are many people, myself included, who feel that NAMA operates at times under a shroud of secrecy, only allowing out as much information as it wishes the public to hear. This is astonishing considering the amount of taxpayer money invested in the body. Several months ago I introduced legislation that would have brought NAMA under the Freedom of Information Act, but Fine Gael and Labour have refused to move the issue on.
“Since the start of the year I have submitted hundreds of Parliamentary Questions to the Minister for Finance on NAMA and while some have been revealing, others have been less than forthcoming. In the last few weeks, the majority of my questions have been met with the response that everything would be answered in this set of annual accounts. From an initial examination of the accounts, I believe there are still answers needed. We don’t have the luxury to allow NAMA provide us with good news stories while hiding the more worrying aspects of the agency from view. Full transparency is needed from the agency and the government about what is going on and we need this government to start taking the taxpayers’ investment in NAMA seriously.”
PQ - “Deputy Pearse Doherty: To ask the Minister for Finance in view of his recent statements regarding on-going negotiations of the State’s bank debt with the EU; the consideration that has been given to seeking to limit the cost of any potential overall loss at the National Asset Management Agency; if he will confirm that the State's exposure to NAMA forms part of the on-going negotiations.
Minister for Finance Michael Noonan: NAMA has been tasked with maximising its return on behalf of the Irish taxpayer. NAMA recently reaffirmed its expectation that the Agency will recoup for the taxpayer the Senior Bonds in issue as well as recovery of its carrying costs and the working and development capital advanced to debtors in the course of its business.
NAMA’s Annual Report for 2011, which will be published this month, will make extensive information available on the Agency’s operations and will chart the substantial progress that NAMA has made towards achieving its core financial objective. NAMA has also, as the Deputy is aware, announced a significant programme of asset development and enhancement in Ireland over the period to 2016 and the availability of €2billion in vendor finance for prospective purchasers of commercial properties controlled by its debtors and receivers. A number of other initiatives are being progressed by the Agency. These activities provide strong evidence of the measures being adopted by NAMA to ensure that it will meet its objectives under section 10 of the NAMA Act.
NAMA’s position is not under discussion in the context of the State’s current discussions on bank debt.”