There are lots of myths around the operation of the National Asset Management Agency, which was set up to take toxic property development loans off the books of certain Irish banks and then sell them off by 2020, preferably at a profit.
Joe Public sees it as a wheeze to bail out the developers or the banks; take your pick. Others are suspicious of the remuneration levels offered to staff. It has been accused of being secretive, of unnecessarily hoarding land and of interfering with the normal operation of the hotel sector by offering cut-price deals via its network of hotels.
It has also been accused of not doing enough to provide social housing or community facilities, or to address the problem of ghost estates.
Nama is a handy punchbag for those with a gripe.
Yesterday, at a hearing of the Committee of Public Accounts, Nama chief executive Brendan McDonagh and chairman Frank Daly attempted to shatter some of those myths and demonstrate to the members, who were sparse in their attendance, that it is methodically working its way through a series of targets towards it wind-down in 2020.
By then, they expect to have repaid every cent of the €30 billion in debt used to buy the loans.
Talk of a €1 billion profit over its lifetime have been quietly parked; break-even is now the new goal.
Some of the details of its work are impressive. Nama has collected €800 million from debtors on assets that they either tried to hide or had sought to transfer out of the reach of the agency. This followed a forensic scrutiny of their finances by Nama.
On the hoary old topic of screwing up the hotel sector, McDonagh flatly denied the assertion. It has closed 12 of its 115 hotels and is not offering cut-price deals, he said, adding that the Competition Authority had rejected two complaints made along those lines.
He also made clear that it has offered 4,000 homes to local authorities for social housing, is working with the IDA to identify sites that would attract foreign investment, and is working with Dublin City Council on a redevelopment plan for the Docklands area.
In a nutshell, it is playing its part to get the economy back on its feet.
Is Nama doing a good job? There’s no easy answer to this.
The agency has probably done as well as could be expected to this point. It has generated €4.5 billion in cash flow from lettings and €9.2 billion from the sale of assets
and loans.
By value, 80 per cent of the sales were in the UK, mostly London. This was the low-hanging fruit. London property has proved to be immune from the chill wind of austerity that has blown across Europe over the past five years.
The trick will be to offload the €12 billion in Irish commercial real estate property over the next seven years. There are signs of life in the market but we shouldn’t get carried away.
McDonagh made the point yesterday that at its peak in 2006, there was only €3 billion of investment activity in the Irish market.
This gives a sense of the scale of the challenge that lies ahead for McDonagh and Nama.
That's to say nothing of the €20 billion or so in face-value loans that Nama is likely to receive in January from the special liquidators of Irish Bank Resolution Corporation, and €1.8 billion in mortgages.
IBRC or no IBRC, McDonagh said it is sticking to its 2020 wind-down target until told otherwise. He’ll need a fair wind at his back to have cleared the decks by then.
