As NAMA sidewinds its way through the first tranche of loans proposed for transfer, let us not forget that the NAMA enterprise involves a calculated risk to public money – the key risk being the assets transferred may not breakeven or indeed may produce losses when realised.
The quality of the calculation of the risk remains to be seen though to this author, Finance Minister Lenihan’s assertions last September 2009 that the property market had the characteristics of being at the bottom give cause for concern following the 8.5% fall in residential prices in the period September-December 2009 inclusive and the predicted fall of 9% in 2010.
Today, another use for the funding is presented by the Society of Chartered Surveyors who claim that 40,000 construction jobs could be saved if the government greenlights €5bn of public building works which would have a guaranteed payback in social and economic benefits. NAMA needs to be vigilant that it does not enter into loss-making contracts because given the sums involved, the opportunity costs are nationally significant.
NAMA Wine Lake 