Sell off peat bogs and forests but keep land, says report
Published 21/03/2011 | 05:00
The country's forests and peat bogs should be sold off but the land on which they sit should remain in state ownership, a radical new plan to privatise Bord na Mona and Coillte recommends to the Government.
Under the recommendations, understood to be contained in the report headed by University College Dublin economist Colm McCarthy on the sale of state assets, Coillte and Bord na Mona would join the generating arms of ESB and Bord Gais on the auction block.
However, Mr McCarthy is understood to warn that there is little point in selling CIE because it offers "limited" opportunities to make money for the Exchequer. The transport group is already heavily subsidised by the state.
The report is understood to also recommend that the government considers selling RTE's wave-band spectrum. Radio wave bands belong to the State and are a valuable asset. It may also recommend changes to how the licence fee is allocated -- suggesting that it be ear-marked specifically for public service broadcasting projects.
When it is published shortly -- possibly this week -- the report is likely to recommend the establishment of a state land company to manage the country's forest land and cutaway bog after the peat and timber is sold off.
Bord na Mona and Coillte employ over 3,500 people between them and any change to the operations of the two companies would inevitably lead to hundreds of job losses.
Both semi-states are traditional job providers in areas of high unemployment. Any moves to privatise them is expected to be strongly opposed, especially from the large left-wing representation in the new Dail.
However, under the FG/ labour programme for government, the State has committed to raising €2bn from the sale of assets. The programme also suggests merging Coillte and Bord na Mona, which would happen to the land-holding companies under the McCarthy proposals.
During the election campaign, the Fine Gael agriculture spokesman Andrew Doyle said Coillte would not be sold.
"Our vital national resources are not up for sale. National resources like forestry, agriculture and marine resources are held in trust for all the people of Ireland," he said.
Labour Party agriculture spokesman Sean Sherlock said the sale of Coillte was not an option. Sinn Fein TD Martin Ferris has demanded that the Coalition issue a statement that the companies will not be sold.
The report is expected to say that Bord na Mona should be sold as a single entity, because its power stations, horticultural and waste management businesses would be attractive to private investment.
The report finds no "compelling reason" why the State should be involved in these markets, the Irish Independent has learned.
Bord na Mona will have to raise new capital to diversify into renewable energy and waste management.
The report is understood to say that Coillte is making a limited financial contribution to the State despite attempts to diversify its business. It has been making most of its money from selling land and young forests and its performance is poor compared with international standards, the report adds.
The forestry company has a dominant position in saw mills and these may have to be sold to different buyers to avoid competition problems. The trees would be sold to the highest bidder.
The report is understood to recommend the New Zealand model, where extensive forests have been sold off since the late 1980s, with environmental and conservation functions taken over by a new department of conservation.
A British government plan to sell state-owned forests had to be abandoned recently, largely because of concerns about the public's right to make use of woodland.
Mr McCarthy also headed the 'Bord Snip' committee which looked at ways of saving €5bn on current government spending.