The State paid more than twice the market value of the 150 acres at Thornton Hall to site a new prison, the annual report of the Comptroller and Auditor General has found.
In an analysis of the procurement process the C&AG found that "the price paid by the Prison Service for the Thornton land - around €200,000 per acre - was at least twice the market price at the time for well-positioned agricultural land with development potential in the target area in north county Dublin".
The State bought the Thornton Hall site for €29.9 million and plans to site the new Mountjoy prison there.
In its assessment of the procurement process the C&AG found that the "overarching factor in the high cost of the purchase was the decision to disclose the State's interest in acquiring a site for a prison".
"In the circumstances, a well-managed, confidential, third-party approach might have allowed the prison service to procure suitable land at a much lower price than was paid of the land at Thornton."
According to the C&AG the purchase of Thornton Hall raises the question as to whether there is a need for greater consistency in the land acquisition procedures employed by the State for public good projects.
The report notes that the Department of Justice initially favoured this approach, but on consideration, felt that the purchase should be open and transparent.
The Department also believed that keeping the identity of the State as the ultimate buyer of the land would be difficult during the complex assessments and negotiations needed prior to purchase.
In a statement released by the Department of Justice today in response to the C&AG's report.
In response to the C&AG's point on the use of a third party purchaser, the Department's statement says: "It was, and remains, the unanimous view of the senior officials dealing with this matter in the Department and the Irish Prison Service that an anonymous third party approach would not have been appropriate or practical in the purchase of a site for the most significant prison development in the history of the State.
"The Department's Accounting Officer and Secretary General, Séan Aylward, is satisfied that it would not have been possible to obtain a site as suitable as Thornton for any less than was paid."
Fine Gael's justice spokesman Jim O'Keeffe said a further €8.5 million will need to be spent on developing the site before the prison can be built. He said Minister for Justice Michael McDowell had squandered public money to create a "grandiose vanity project".
Labour spokeswoman on finance Joan Burton said the findings supported public criticism of the deal.
"This whole episode shows the desperate need for reform of the land acquisitions process so that sites can be properly evaluated, with considerations such as access and other facilities being accounted for during the purchasing process.
