Galway Bay fm newsroom - The Auditor has raised concern about the city council's interest only loans of 37 million euro which were drawn down for the purchase of lands, and to build houses, under the Affordable Housing Scheme.
The Auditor's report, which has been presented to councillors, states there will be a substantial burden on the local authority's finances once principal on these loans has to be repaid, as well as interest.
32.3 million euro was drawn for buying land and €5m was used for the building of houses in what was known as the Affordable Housing Scheme; the houses have not yet been sold and this leaves the city council carrying the debt.
The interest bill to the city council on these loans in 2018 was €468,000.
However, the Auditor states that the repayment of principal would place a substantial burden on the council unless suitable funding sources can be identified to offset the cost.
The council CEO responded by saying that all such loans in local authorities are under review nationally.
He said some of the lands in question are on the route of the proposed City Ring Road and compensation will be forthcoming.
