Sale of State firms would be stupid, says Ryan

MINISTER FOR Energy Eamon Ryan warned yesterday that it would be “stupid” to dispose of State companies such as the ESB, Eirgrid and Bord Gáis.

A group led by economist Colm McCarthy is reviewing the State sector, including the ESB, Irish Rail, RTÉ and the airport companies, with a view to establishing which of them could be sold to raise cash for the exchequer. The group is due to report by the end of the year.

Mr Ryan argued that the way in which energy utilities such as the ESB, Eirgrid and Bord Gáis have adapted from the traditional model to a new way of doing business driven by information technology and advances in the use of renewable energy meant they were more valuable now.

“This is the new economy, we would be stupid to throw it away,” he told a conference on the future of State-owned enterprises organised by Public Affairs Ireland in Dublin yesterday.

Mr Ryan said the State’s energy companies were both profitable and were investing in the economy.

The Minister pointed out that the ESB plans to invest €22 billion over the next decade, while Bord Gáis is investing €2.5 billion, national grid operator Eirgrid €4 billion and Bord na Móna €1.5 billion.

“We know that those companies can make those investments,” he said.

“That €30 billion plan is credible and long term.”

Similarly, he told the audience that the companies earned €700 million in profits last year, paid a total of €320 million in dividends to the State and that they employ 11,000 people.

The Minister criticised Fine Gael’s proposals to split the companies’ distribution businesses, which would involve splitting the ESB and Bord Gáis from their networks.

Mr Ryan said this would weaken these companies and make it more difficult for them to raise money from capital markets.

He said the work by Eirgrid to develop systems to accommodate more wind-generated power on the country’s electricity networks was attracting international attention.

Mr Ryan added that South Korea asked the State to discuss this work at the G20 summit this weekend.

Senior Department of Finance official Robert Watts questioned whether it was wise for the State to own two companies, such as the ESB and Bord Gáis, that are competing with each other in the same markets for the same customers.