The Prison Service paid at least twice the going rate when it purchased 150 acres of agricultural land for the proposed new prison at Thornton, north Co Dublin, according to the Comptroller & Auditor General's (C&AG) annual report for 2005 published yesterday.
The high price of €29.9 million stemmed from the decision to disclose the State's interest in acquiring the site for a prison, the C&AG, John Purcell, concluded.
"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 for the land at Thornton," Mr Purcell said. The land acquired for the prison was also greater than the 100 acres originally sought for the new prison and the relocation of the Central Mental Hospital, according to Mr Purcell. Although this allowed for future expansion, the fact that so much was paid for the land called into question the value of the deal.
However, the Department of Justice yesterday rejected this finding, saying such a confidential approach would not have been appropriate or practical in the purchase of a site for the most significant prison development in the State's history.
"The use of a third party would not, in our view, have been sufficiently transparent to provide the necessary accountability, would not have identified the best sites and could have led to grave difficulties with the vendor," it said in a statement.
In 2003, the Prison Service asked the OPW to look for a greenfield site to replace Mountjoy Jail. The land was originally expected to cost about €10 million. The OPW advised the department and the Prison Service to proceed confidentially, using agents who would not disclose that they were working for the State. However, the Prison Service rejected this advice, saying it would lead to allegations that political influence or corruption dictated the choice of site.
The OPW accepted this approach and hired property consultants CBRE to search for sites.
According to Mr Purcell, the contract with CBRE did not comply with procurement rules in several aspects. The contract was not put out to tender and was not advertised in the Government publication Iris Oifigiúil.
Agricultural land in north Dublin was selling for €20,000 to €30,000 an acre in 2004, compared to the €200,000 an acre paid for Thornton. However, Mr Purcell acknowledged that because of its proximity to Dublin and the M50, comparable land in north Dublin near Thornton had development potential which increased its value to about €100,000 an acre.
By late 2004, three sites had been shortlisted but each fell through before Thornton came into play. "The State twice ended up negotiating a sale with single vendors, with no effective degree of competition. The lack of apparent alternative deals on offer may have created a fear on the part of the State agencies that other, better offers were unlikely to emerge," the report said.
Residents of Kilsallaghan, near Thornton, yesterday protested outside the Dáil at the plans to build the prison.
