Housing minister and Longford-Westmeath TD, Willie Penrose may be set to follow in the footsteps of Denis Naughten as he sets his face in stiff opposition to party plans to close Columb Barracks in Mullingar. The sole artillery training facility for the Irish army, the complex covers 26-acres and its buildings are listed. The barracks is presently home or workplace to 200 military and 20 civilian personnel. Over the weekend at a rally to protest against the barracks’ closure, Minister Penrose claimed that the annual cost of securing an empty barracks would be €150-200,000, that the 26 acres were designated for leisure or recreational use, the building is listed “so nothing can be done” and as for the disposal of an empty facility, you couldn’t sell “a bag of sticks today”.
However, according to defence minister, Alan Shatter speaking on RTE Radio’s This Week programme yesterday at lunchtime, there was a major “international education company” looking for a site in Ireland to deliver degree-level courses aimed at international students, and that this organisation had been speaking with NAMA. The suggestion was that the barracks might find a future use as a third level education establishment.
However it is the intervention by Minister Penrose reported in today’s Irish Times that is more worrying for NAMA. The minister has reportedly written to the Attorney General, Maire Whelan “seeking clarity on how NAMA’s terms of reference could be changed to give it a broader remit that goes beyond securing the best achievable financial return for the State”. Of course NAMA’s primary purpose is to maximize returns on the loans it has bought, and although there is a reference to a NAMA objective (the eighth of eight objectives listed in section 2 of the NAMA Act) “to contribute to the social and economic development of the State”, there is no detail in the Act as to how NAMA should deliver on this objective which seems to have been included in the legislation as an after-thought.
The compromising of NAMA’s operations by narrow political interests has been dealt with before on here. It has also been dealt with in a paper by NAMA board member and former IMFer Steven Seelig in a paper on asset management companies. In short, it is a bad idea to give a state-run asset management company two conflicting objectives, because you might end up with a mess where neither is met and NAMA excuses its performance by saying it was being torn ‘twixt pillar and post.
On the other hand there is a dire shortage of social housing in this country as reported on here recently, and NAMA has reportedly 10,000 homes under its control inIreland. But allowing individual ministers and ministries to pick off NAMA will be counter-productive. If the Government decides that NAMA is to use property under its control for social purposes, there is nothing to stop NAMA selling the property at market prices to the relevant department (Education, Health, Housing etc) and then making a dividend payment from its profits to central Government which can then prioritise a use for the dividend. This would preserve NAMA’s objective of maximizing profit whilst also delivering a social benefit in a controlled manner, not to any one ministry’s advantage.
Last Thursday, Minister Noonan who is the senior minister as regards the operation of NAMA said that he didn’t see a need to change the NAMA legislation, at least not yet.
NAMA Wine Lake 
There are two main issues here:
The first is whether NAMA is doing a responsible job in relation to its debt collection and property management roles. Whatever about debt collection it is clear that NAMA is not taking its property management role seriously. NAMA ‘s full concentration is on disposal of prime properties. NAMA seems not to care a hoot about the devastated sites around the country which are either directly or indirectly in its care and management.
The second issue is whether the NAMA defined objective of “securing the best achievable financial return for the State” is to be so narrowly defined that it simply means a smouldering sale of properties in its management.
I have to say I support the idea that NAMA be forced to take a broader view of what “securing the best achievable financial return for the State” means in the context of an organization of its size and economic and social impact. Mr Penrose is right to seek the advice of the Attorney General on this issue and if that advice defines NAMAs role as being limited to a ‘bring in cash quickly at any cost’ brief, the Minister should change the legislation.
While the timing of Mr Penrose’ letter to the AG and the closure Columb barracks issues may make it appear that Mr Penrose is attempting to get NAMA involved in the Mullingar issue or property, I doubt that the Minister is conflating both these seperate issues.
But the Minister is right in seeking to make NAMA work for the country as distinct from working solely as a debt collecting agency for the ECB.