I'm not letting that last comment on MacNamara's stand unchallenged.
I cannot comment on Pierse, having seen little enough of their work, but I doubt they were as bad as you make out.
It is understandable that you â€œsectorâ€ professionals would comment on the quality of the work, but, to be honest, it does not matter a damn now whether or not they were good/bad/indifferent.
What now matters is that they are officially broke and will leave another wodge of unpaid debt and tragedy behind them. That will hasten the demise of many more subbies.
What has fascinated me about the lenders and developers is how they fooled each other. Letâ€™s just look at one hotel project, the Shelbourne. Bought supposedly for â‚¬140 million, a further â‚¬125 million was spent on renovations. Curiously, the hotel has 265 rooms, so that works out at a cost of Euro 1 million per room. Assuming that a luxury hotel room is 30 sqm, and allowing for a contribution of space to a bar/restaurant/common areas , the room cost should be about 75-100k max. (Open to you professionals to correct me on this.) So the per room â‚¬1 million cost at the Shelbourne is more than wide of the mark.
Looking at pay-back, with 265 rooms, to keep the figures â€˜roundâ€™ for simplicityâ€™s sake, letâ€™s allow 250 rooms, as 15 will be out of service for repair/whatever. The survey last July by Bastow Charleton said that in Irelandâ€™s boom years, profit (before debt service) per room of â‚¬14k was achievable. Today, because of falling tourist numbers, an oversupply of rooms and stupid pricing by receivers/administrators, and even assuming good occupancy rates, that figure is now down to 3k euro profit per room before debt service cost. That would give the Shelbourne an annual before debt service profit of 750k from the rooms. That would service a debt of â‚¬ 15 million.
Even at 14k per room it could service interest on debt of â‚¬70 million, which is considerably below the lowest estimate of the initial purchase price and presupposes a permanent capital repaymant moratorium.
How did anyone think it could work?? How could any banker lend to a project like this??