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Crucial semi-state report will fall to incoming government

The crucial report on the future of the semi-states now looks unlikely to be finished before the general election, leaving the incoming administration with the controversial task of implementing its recommendations.

The report is expected to recommend a raft of privatisations, with the IMF already pencilling in €10bn of revenues from the sale of state assets.

A team led by economist Colm McCarthy is reviewing companies including ESB, Bord Gais, RTE and An Post.

It is understood some final meetings with companies are still taking place and then the final sections of the report have to be written. The Dail is due to return after the election on March 9.

The review group on state-owned assets was set up last year by Finance Minister Brian Lenihan. Submissions from companies and individuals have been requested by the three-man team doing the review. Each major company has also sent in material for them to study.

It is understood the report's authors believe the value of the assets may be significantly less than some estimates that have appeared in public.

Pension deficits are emerging as a key problem and a number of the companies also have large debt burdens and unsuccessful subsidiaries.

Mr McCarthy, the author of the Bord Snip report, is also believed to be anxious to eliminate duplication among the companies, many of which are involved in alternative energy and infrastructural projects.


Mr McCarthy, who is a long-time critic of wasteful public spending, is likely to seek cost benefit figures on certain spending programmes adopted by the largest semi-states.

The sector is currently facing a number of problems and all borrowings of the various companies now have to be disclosed to the Department of Finance. This was a condition of the EU/IMF programme.

The long-term plan is to sell the assets and offset the proceeds against the national debt. But the demand for Irish assets is likely to be modest and many of the companies cannot be sold due to political sensitivities.

For example, the Labour Party's official policy is against privatisation and the memories of the sale of Eircom are fresh in the memories of politicians.

However the IMF-EU programme includes firm commitments to sell state assets to reduce national debt, so it may not be possible to avoid some sell-offs.

The first company likely to be put forward for sale is Bord Gais, which is seen as holding less national infrastructure than the ESB.

The ESB itself is unlikely to be sold off, but its power station assets and overseas businesses may come under pressure.

The National Lottery contract is also likely to be offered for sale, with many expecting some of the larger ports to be disposed off.

Private equity players are very keen on infrastructure opportunities with steady income streams, but the volatile nature of the Irish economy makes valuing these kind of business more difficult than usual.

Indo Business