ESB chief to retire a year before end of contract

ESB CHIEF executive Pádraig McManus plans to retire shortly, a year before his contract at the helm of the State-owned energy company is up.

The company announced yesterday that Mr McManus told the board today that he intends to retire, but will remain in the job until a successor is appointed.

He was originally due to step down early next year, but his decision means that his retirement will come before that date.

ESB gave no reason for his decision, but company sources suggested yesterday that Mr McManus himself felt that this was the right time to leave.

Government and EU policies mean that the company is facing a number of changes in the near future, including a possible split of its key divisions and sale of some of its assets or businesses.

Mr McManus is the highest paid State company chief executive and his total package last year, including pay and pension contributions, was worth €752,000.

He took over as chief executive in 2002, but the last government re-appointed him for three years when his original seven-year term was up.

During his time as chief executive, the one-time monopoly began to face competition on all fronts, most recently in the household market, but before that in the industrial, commercial and small business sectors.

Last year, it completed the biggest acquisition in its history when it bought Northern Ireland Electricity from Viridian for €1.2 billion.

Also in 2010, the company completed the first new power plant it had built in over a decade when the €400 million plant at Aghada, Co Cork began generating electricity early in the year.

Mr McManus is from Kildare and joined the ESB in 1973 after completing an engineering degree with University College Dublin.

His career took him to Saudi Arabia, where he worked on the electrification of Riyadh’s western suburbs, and Ghana in west Africa, where he oversaw the development of that country’s electricity networks.

He was managing director of ESB International and the group’s commercial director before he took the top job in 2002.

ESB chairman, Lochlann Quinn, said that Mr McManus’s tenure had been one of exceptional achievement.

“Under Pádraig’s leadership, ESB has grown to become a company with annual revenues in excess of €3 billion, investing almost €1 billion each year in infrastructure and paying one-third of its profits to the exchequer.”

Monopoly no more more: change may await energy supplier

THE ESB looks very different today from what it was in 1973, when outgoing chief executive Pádraig McManus first joined the State-owned energy company.

Back then, it had a monopoly on generating and supplying electricity in the Republic. Now the ESB operates, theoretically at least, in an all-Ireland market, and in the Republic competes with State-owned and independent players to supply both electricity and natural gas to households, business and industry.

Its international business has been singled out as key to future growth, and it has worked on large-scale projects in Spain and Britain, as well as contracts further afield. A lot of this happened on McManus’s watch, and it appears he has done a good job in managing the company. But the ESB could be facing further, more radical change within a very short period.

A group led by economist Colm McCarthy is due soon to make recommendations to the Government on the future of State companies. This could include proposals to sell part or all of its energy companies – the biggest of which are ESB and Bord Gáis.

At the same time, the EU-IMF bailout deal commits the State to reviewing its involvement in the energy sector this year, and if necessary to disposing of some companies in the sector.

The Government will have to decide soon on whether to go ahead with a proposal to transfer ownership of the national grid to another State company, Eirgrid, which currently manages it.

This is being driven by the EU. While there is a chance the State could get a derogation from this, it has just months to apply for it.

The company’s traditionally strong unions are opposed to such a move, while its management are anxious about the possible impact of losing an asset valued at €1 billion, though the company would have to be compensated for this. Whatever happens, the ESB looks likely to provide the Government, not to mention McManus’s successor, with some tough challenges.