The Electricity Supply Board will engage consultants to examine its future, including whether it should float the company or form a strategic alliance with another player. The consultants' recommendations are expected to be brought to Government before Christmas.
The move follows a request from the Minister for Public Enterprise, Ms O'Rourke, who wrote to the company last Thursday, asking it to consider its future. The board considered the Minister's letter at its monthly meeting yesterday. The consultants are expected to begin work in mid-September.
The ESB is facing competition from outside players as part of an EU drive to open up the electricity market. From next February, around 28 per cent of the market will be open to competition. It means the biggest users of electricity can now choose to buy supplies from the ESB or other suppliers.
At least five parties have indicated their intention to compete against the State company, but it could be several years before there is a competitor in the market.
Ms O'Rourke signalled last February that preparing the ESB for competition remained a priority. In a Dail speech on legislation to pave the way for converting the ESB to plc status and establishing an electricity regulator, she said there was no shortage of options, including strategic alliances, a public share offering and even public-private partnerships.
Sources said yesterday that the Minister's letter had not come as a surprise to the ESB. One source said it would have been "remiss of the ESB not to have been looking at the issue of ownership over the past number of months".
It is understood Ms O'Rourke stressed that it was important to consider every aspect of the ESB's operations to ensure it was efficient and ready to face competition. She said that where this was not so, "a concerted programme" for rapid improvement should be put in place.
She makes it clear in the letter, which was sent to ESB chairman Mr Billy McCann, that she is open to consider any views or proposals the board may wish to make. Some sources said a public share offering was a long way off and the Minister had emphasised that State companies required different approaches.
Ms O'Rourke also stressed that progress could only be achieved in close co-operation with staff and that "the need for dialogue, trust and confidence building is greater than ever". The ESB's most recent results show that pre-tax profits last year rose to £218 million, up from £182 million in 1997. Turnover was up to £1.26 billion from £1.19 billion. The company said it planned to invest £2 billion over the next five years in capital projects. Total borrowings last year amounted to £701 million, a reduction of £87 million on the previous year.
