National Lottery deal may net just €300m upfront in State sell-off
Lotto licence structure changed as Howlin seeks more money for good causes in the future
The sale of the National Lottery may net just half of the forecast €600m upfront, following changes to the licence format.
"We've structured the deal so we have a very high payment for good causes and I don't want to diminish that," Public Expenditure Minister Brendan Howlin told the Sunday Independent. "There's a lot of conditionality with that and with margins for retailers, so I'm more content to have a lesser upfront payment.
"Last year good causes got around €220m. Under the new scheme that we have now, we reckon that we can ratchet that up to €300m over five years and that's an ongoing stream of revenue," Howlin added.
"We need to get money now to invest, but we also need to have a robust streaming fund for good causes that holds the integrity of the lottery for people, who like to think that a chunk of the money will fund good causes."
Lottery operators G-Tech, Camelot and Australian firm Tatts are all in the running for the licence to run the lottery. An Post is also bidding in partnership with Camelot.
An Post's decision to bid for the licence has raised eyebrows as it creates the bizarre situation where one arm of the State is bidding to buy another State asset. Howlin dismissed these concerns.
"They are likely to bid in a consortium. That's a good thing as far as I'm concerned."
Some €200m from the sale of the licence has been "ring-fenced" to be spent on the new children's hospital, with the rest of the funding coming from the health capital plan.
While the rest of the Oireachtas steadies itself for a long sleepy summer, Howlin's department is hitting the accelerator as the pace of State asset disposals increases.
Semi-state forestry company Coillte will not be sold but is instead likely to be merged into Bord na Mona to create a vast State bio-energy company. This new renewable behemoth will form the centre of State plans to ramp up green energy production through large numbers of wind farms, with excess electricity being exported to the UK.
The financing for this ambitious programme is likely to come from a variety of sources, including the National Pensions Reserve Fund and EU funding.
"New Era has made an evaluation. They've made a presentation to me and they've made a presentation to Simon Coveney. We've agreed a way forward – and we'll be bringing joint proposals to Government shortly," Howlin said.
State asset manager New Era is likely to be overhauled to become a new State investment bank with a focus on funding this bio-energy and other major State development projects.
However, the sale of the State's 25 per cent in Aer Lingus now appears to be on the back burner.
"There's more than the reasonably modest value for a shareholding of 25 per cent of Aer Lingus. There's the strategic importance of holding on to a carrier and ensuring that there's competition between Ireland and the UK, and into the Heathrow hub in particular," Howlin said.
"It's not on our agenda for sale in current markets and circumstances. We'll have to see what happens in relation to the final Competition Authority review in the UK and the impact of that on Ryanair's shareholding."
The sale of State assets is the crucial plank for the Government's plans for stimulus, which have been ratcheted up over the last week, with the €150m construction programme boost.