Government to sell off minority stake in ESB
Published 14/09/2011 | 05:00
THE Government will today decide to sell off a minority stake in the ESB.
The Cabinet will also whittle down a list of state assets to be valued for possible sale in the future.
But the ESB will be the only semi-state company to be signed off on for part-privatisation. The electricity company will not be broken up into its component parts and will still remain in majority state ownership.
The move means the power-generating stations, electricity transmission network and customer services will all remain in the same company.
Government sources said last night the decision on selling a minority stake in the ESB would come before the weekly Cabinet meeting this morning.
The Coalition wants to reinvest part of the proceeds of the sell-off in broadband, energy and water infrastructure.
The Government plan is to get New Era, Fine Gael's idea to establish a semi-state company to invest in infrastructure to create jobs, up and running.
But the Coalition is under time pressure from the International Monetary Fund and European Union to indicate how it plans to raise the funds from privatisation agreed in the bailout deal.
Ministers will also have to convince the bailout troika of the value of pumping money back into infrastructure, rather than simply using the proceeds to reduce the budget deficit.
A detailed proposal will be drawn up showing the return to the economy from investing in the infrastructure.
The IMF shifted the goalposts on state asset sales last week, saying it wanted €5bn raised -- more than double the Fine Gael-Labour Party coalition's own target of €2bn.
The Coalition will have to strike a tough deal with the IMF-EU when the delegation returns in October to review the progress of the bailout.
The task of preparing the ground for the ESB to be privatised will be handed over to the Government's in-house financial experts. The State's money managers, the National Treasury Management Agency (NTMA), will be told to estimate how much can be made from the sell-off of part of the ESB and the best way to handle the sale. The agency will also be asked to assess the value of other assets on a shortlist of potential sales.
The preparatory work needed for privatisations will be handled by New Era, which is starting up as a new unit of the NTMA.
Meanwhile, Energy Minister Pat Rabbitte last night said no home in the country would have their electricity or gas supply disconnected this winter.
But the minister's commitment is based on families in arrears agreeing to a pay plan or having a pay-as-you-go meter installed in their homes.
Mr Rabbitte dismissed the perception that Ireland has the highest electricity prices in Europe. The minister said electricity and gas prices were competitive in this country and compared favourably with prices across Europe.