OPINION:  THE DUBLIN Docklands Development Authority has had its fair share of problems of late, writes John McManus

The €200 million "U2 Tower" project on Grand Canal Dock has been put on hold by the Geranger consortium, citing the current state of the property market. Further south on the Poolbeg peninsula, the authority is an investor in Bernard McNamara's ambitious project to redevelop the Irish Glass Bottle Site. Like most developers, McNamara is under pressure and was reported last week to be reviewing the timelines on a number of developments.

But by far its most immediate problem is the fallout from Seán Dunne's challenge to the planning permission granted by the authority to his rival Liam Carroll.

Last month, the High Court upheld a challenge to the authority's decision to grant planning permission to Carroll's North Quay Investments for its eponymous €200 million development in the docks. The scheme is a lynchpin of the authority's plan for this part of the docks and it was granted the permission under the authority's fast track of Section 25 powers, bypassing the normal process.

The court found in Dunne's favour because of the existence of an earlier agreement between the authority and North Quay under which North Quay would cede, free of charge, some land that the authority wanted. The agreement gave rise to a "reasonable apprehension of bias" on behalf of the authority in reaching its decision on Carroll's scheme in July 2007, the court found.

Following his victory, Dunne is now reported to be seeking a High Court order to have the €85 million office block built under the permission torn down. The authority was expected to appeal the decision, but it emerged two weeks ago in a separate but related case that it will not.

The reason was not disclosed, but the decision must have implications for the second case, which is a challenge by Treasury Holdings to the North Quay permission on the basis that agreement between North Quay and the authority gave Carroll's company an unfair advantage in terms of influencing how the area would be developed.

The presumption is that Treasury's case will be successful, which leaves the authority looking at multi-million compensation claims from Dunne, Treasury and possibly even Carroll.

However, given that all three need to work with the authority in the future, there must be room for some horse trading. But it is an uncomfortable place for a State agency to be and it raises questions about how it conducts its business and the level of corporate governance at the body.

The decision to enter into the "secret agreement" with Carroll seems to be at the heart of its predicament. Its objective - to the extent that we know - seems to have been reasonable; to allow the authority to assemble a site on which to create a public space that would be in keeping with its remit to develop the docklands from a social as well as commercial perspective.

The authority presumably did not realise that its action would be perceived by its other developer clients as putting them at a disadvantage. Either way, it seems sloppy and not really the way that taxpayers' money should be spent.

It does, however, seem to be in keeping with the authority's vision of itself as a "can do" organisation, not your typical State agency, and very much of the new entrepreneurial Ireland. In that respect, it was reflecting two of its former leading lights, Lar Bradshaw, the former chairman, and former director Seán Fitzpatrick, the chairman of Anglo Irish Bank.

However, this exuberance would appear to have led to several missteps, the most problematic being North Quay.

But other deals could prove equally costly, most notably the Irish Glass Bottle site, where it has invested €32.8 million of taxpayers' money in an unsecured loan. If, as it appears, it chose to live by rules more appropriate to private sector endeavour than State agency activity, then it must be judged by that same yardstick.

It is facing lawsuits and the North Quay plan is in disarray; its flagship tower project is stalled and there is a €32.8 million exposure to a leveraged high-risk development. In the private sector, that would be called failure.