Wednesday, 14 September 2011
Dáil Éireann Debate
2. Deputy Martin Ferris asked the Minister for Communications, Energy and Natural Resources his views on proposals to sell parts of the ESB; if he has made any decisions on this matter; and if he will make a statement on the matter. [23961/11]
Deputy Pat Rabbitte: The EU-IMF programme of December 2010 involves a commitment that the Government will outline methods to raise funds through asset disposals. The 2011 budget included a similar commitment.
The programme for Government includes an intention to finance investment in the State from the proceeds of the sale of certain State assets. The Government has also considered the report of the McCarthy review group on the sale of State assets and the recommendations of that group.
I accept that the fiscal path, to which the Government is committed under the EU-IMF agreement, demands that the option of realising value from State assets be fully explored. I also accept that there is significant value in energy commercial State companies, which could be realised at an appropriate time after necessary further analysis of all the complex factors relating to the disposal of commercial assets in the energy sector.
The sale of a minority stake in the ESB as an integrated utility has, this morning, been agreed by Government. This decision is an early demonstration of the commitment by the Government to the programme for Government’s objectives and to its obligations under the EU-IMF memorandum of understanding.
This sale will be advanced by means of a defined process involving a full evaluation of the best approach to be taken, including consideration of the size of the minority stake to be sold. That process will be progressed by a group co-chaired by the Department of Communications, Energy and Natural Resources and the Department of Public Expenditure and Reform, also including officials from the Department of Finance and availing of expertise from the National Treasury Management Agency and NewERA.
Full consideration will be taken of the energy policy and regulatory framework in this evaluation, and appropriate consultation will be engaged in. The group will report back to Government with a recommendation by the end of November.
The decision by Government today recognises the strategic importance of the energy sector to the economic and social functioning of the State, and that the State must continue to have a strong and direct presence in electricity, particularly in the regulated transmission and distribution networks. This presence must be maintained in a way that protects overall economic competitiveness and does not deter private investment. The process to analyse options for the minority stake sale in ESB will fully reflect these principles.
Deputy Martin Ferris: While I thank the Minister for his reply, I wish to reiterate that my party is totally opposed to the sale or disposal of any State share in the ESB, be it a minority one or otherwise. The acquiescence of the programme for Government to the demands being made by the IMF and others is unacceptable and absolutely wrong. For generations, the ESB and other semi-State companies have served this State well, both socially and infrastructurally.
Deputy Martin Ferris: I will get there. What has been agreed today is a retrograde step and will be a disaster in the long term. What percentage minority share has the Government agreed to sell off? What is the projected value of that share to the economy or, should I say, to the IMF?
Deputy Pat Rabbitte: I hear the Deputy’s reiteration of his opposition to the disposal of any State assets. I also hear his conviction that there is no necessity for the Government to respond to the demands of the IMF-EU memorandum of understanding.
However, he has not explained how he would run the social services of the State in circumstances where we walk away from the agreement imposed on us by the previous Government. Due to the injunction by the troika that we must dispose of some State assets, I find myself in a position I do not want to be in but I acknowledge that the survival and viability of this economy is at risk. We have to ensure economic recovery and get people back to work.
No decision has been made regarding the percentage that will constitute the minority stake. That will be a matter for the process I have described in my initial reply. A group comprising my Department and the Department of Public Expenditure and Reform will, between now and 30 November, work out the many complex and intricate decisions that must be taken in the context of the disposal of any share in a State company. I agree entirely with Deputy Ferris on the role the ESB has traditionally played in this society and economy. I am happy to report that will continue to be the case because the Government’s decision is to dispose of a minority stake.
Deputy Martin Ferris: I cannot understand why the Minister, after taking a decision in principle to dispose of a minority stake, does not know the percentage figure to which that minority will equate.
Deputy Martin Ferris: The Minister does not know the value of the stake to the Exchequer. He has taken a decision and he speaks about the financial situation in this country. Will the financial situation be improved by privateers taking over part of our national assets?
Deputy Martin Ferris: The Government will sell off the State’s assets one by one, starting with the decision taken in principle this morning on one of the most lucrative of our State assets. It is an asset that has supplied an outstanding infrastructure——
Deputy Pat Rabbitte: I am pleased, as should be all my colleagues in this House, with the growing recognition in Europe of the responsible manner in which this Government is dealing with the crisis we inherited.
Deputy Pat Rabbitte: That is becoming clearer with every day that passes. I cannot understand how Deputy Ferris can assert that the Government is handing over control of State companies to outsiders. A minority stake is not control and there is no question of this Government handing over control. The ESB has strategic significance for the Irish economy and we recognise its importance in the context of energy security and supply.
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