Wednesday 21 February 2018

State firms fire-sale ruled out

Colm Kelpie and Ed Carty

The Government has ruled out any sudden sale of commercial state-controlled companies.

As an independent report revealed potential sales of energy, industry and transport assets, the threat of a "fire sale" to raise €2bn was ruled out.

Brendan Howlin, Minister for Public Sector Reform and Expenditure, said privatisation would only take place when the market conditions were right.

"The Government will now study the findings of the report and its extensive recommendations in detail," he said.

"As set out in the Programme for Government, non-strategic assets up to a value of €2bn will only be sold when market conditions are right and when adequate regulatory structures have been established to protect consumer interests."

The review of state assets by economist Colm McCarthy - his second investigation into trimming public costs and raising finance - called for energy giants ESB and Bord Gais to sell off some parts of their business.

He called for a wage review in the semi-states. The report said pay in the companies should be compared to other sectors in Ireland and competitor countries like the UK.

The UCD expert said Eirgrid, the electricity transmission, should take over sections of the grid operated by the two big power suppliers.

His report also said ESB should dispose of all overseas interests - it owns Northern Ireland Electricity - and make no further expansion outside Ireland.

The state's stake in Aer Lingus should be sold, the report said, while state-owned ports, including Rosslare, should be restructured into several multi-port companies built around Dublin, Cork and Shannon-Foynes.

The review also said the National Stud should be sold.

Mr McCarthy said the report of the Review Group on State Assets and Liabilities should be seen as an advisory document.

"It is a matter for the Government and the Oireachtas to decide what should and shouldn't be done" he said.

"The Government isn't under any immediate financial pressure, in the sense that the EU/IMF programme is in place, which means that the Government should be funded for the duration of that programme."

The economist said it was also not practical to think about selling off many of the companies "in a big hurry".

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