Wednesday 21 March 2018

Semi-states' submissions to McCarthy will determine their futures

Emmet Oliver

Every major semi-state has sent a detailed submission on the future of their company to the government review group chaired by economist Colm McCarthy.

The review group is now expected to report by year-end and some of its preliminary findings may be included in the Budget speech by Minister for Finance Brian Lenihan.

Most semi-states have sent in a detailed submission, although there are some "stragglers''. The group will now sit down with the chairman and chief executive of each semi-state, with discussions to focus on whether the firms could be sold off or if there are new ways to enhance their value.

For the first time, the government department that supervises each semi-state will also set out its views on the companies and their future.

The ESB is the most valuable firm in the semi-state stable, but ministers are nervous about selling this company and particularly the network it owns. Bord Gais is seen as a more likely candidate for privatisation.

The controversial privatisation of Eircom is what haunts many of the current Cabinet and this is likely to prevent them from pushing for large-scale privatisation of state firms.

The McCarthy group is also likely to explore the large overlaps among state companies.

The total value of the state companies will also be looked at. But this value is likely to be greatly reduced when account is taken of their large pension liabilities.

The group also wants to get a more realistic and up-to-date picture of what their assets are worth.

Many of the state companies do not mark their assets to market value the way that private sector companies do.

Irish Independent

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