A Freedom of Information request submitted by a resident of Saggart to the Office of Public Works has yielded some interesting insights into the deal that was struck by the State with the owners of Citywest.
None more so than that the State agreed to buy the site for a price that was 50% above the price proposed by the owners in 2022.
Last month, the State signed off on an agreement to buy out Cape Wrath for €148.2 million. The Minister for Justice, Jim O’Callaghan, defended the purchase on the basis that it would save the taxpayer €1.25 billion over the course of the 25 year term.
Citywest currently holds 2,000 refugees with a capacity for 2,300. Minister of State, Colm Brophy, said that there are no “immediate plans” to increase the numbers. Local residents and others have expressed scepticism about that given the lack of information and engagement over the past number of years.
The document that was provided to the requestor is dated March 21, 2022, and headed “STRICTLY PRIVATE & CONFIDENTIAL.” It is a proposal to the Department of An Taoiseach regarding the State purchase of Citywest Hotel, Leisure Centre and Convention Centre.
The memo was submitted, on request, by the owners of the complex, Cape Wrath Hotel Unlimited. There are three options presented:
Option A would have involved the State licensing the hotel for two years with an option to renew after one year. The State would have “exclusive use” and pay a fee of €125 per night for a single room or €150 for a double room. The license was modelled on the one which the hotel had with the HSE when it was used as a Covid quarantine centre.
(It is worth bearing in mind that when asked in February this year, Minister Norma Foley said that the average daily payment for each IPAS resident was €84 and that this included all accommodation and related costs.)
Option B was for a 20-year lease for 756 rooms with an annual rent of €7.56 million. The rate per room would be equivalent to €10,000 per room per annum. Cape Wrath would remain as owners of the site.
Option C was a proposal for the “straight purchase” of the hotel, leisure centre and convention centre. The price proposed was €100 million. The State has agreed to pay the owners $48.2 million more than they proposed three years ago.
Cape Wrath also recommended that the State consider accepting one of the three options for the 395 bedroom Golf Hotel which is also owned by the people who own Cape Wrath.
The Golf Hotel remains in the ownership of Cape Wrath and partners and will continue to function as a separate IPAS centre. That is another of the reasons for local opposition as a huge state asylum centre will exist cheek by jowl with the Golf Hotel with hundreds more asylum seekers, but under the usual terms involving a private contractor.
In their proposal, Cape Wrath refer to their then ongoing negotiations with another big earner in the sector, Bridgestock Care, for the management of the Golf Hotel but that was not concluded. The day to day running of the Golf remains with Cape Wrath which has contracts with private security providers to cover all of the asylum centres on the Citywest campus.
Which means that not only do Cape Wrath and its shareholders benefit from the taxpayer buying the hotel and using it as an effectively permanent IPAS centre, but they will also continue to benefit from the regular cheques from the taxpayer through their arrangement with private management contractors.
Cape Wrath received payments of almost €90 million between January 2024 and the end of March this year. In total since 2022, the company has received in the region of €200 million in payments from the taxpayer channelled through the Department of Integration now under the aegis of the Department of Justice.
As part of that huge transfer of money to Cape Wrath and its shareholders they even had their rates to South Dublin County Council paid. In the first quarter of 2024 that amounted to €739,680.
When I contacted them about this, the Department of Integration stated that “The Department paid the council rates for the 8 months occupancy in 2022, and the full year cost for 2023 and 2024.” Which I estimated would have amounted to €2 million.
When you consider that we have an elected Dáil which gets all excited over contracts for bike sheds which cost a fraction of all of the public money transferred to Cape Wrath – with no benefit to the vast majority of taxpayers – ask yourselves why this huge transfer of hundreds of millions including the purchase price has not been seriously challenged.