The Minister for Public Enterprises, Ms Mary O'Rourke, is to meet the ESB chairman, Mr Billy McCann, today in an effort to resolve the impasse over the semi-state's incoming chief executive's salary.
However, Government sources have indicated that the Cabinet will not change its stance and will not allow the ESB to pay its chief executive, Mr Ken O'Hara, the remuneration package it wants. It is understood that the ESB has suggested that Mr O'Hara be given a special contract, which would surmount the problem, but the Government is highly unlikely to agree to this.
The Buckley report recommends a range of salary increases for people employed in the public service and the Government is said to fear that making an exception for Mr O'Hara would spark a host of demands for pay increases.
The ESB was told last week that Ms O'Rourke could not approve Mr O'Hara's remuneration package, said to be worth around £200,000. This is because the Cabinet decided in July to defer implementation of the Buckley report on semi-state pay.
The package which the ESB wants to offer would be far more lucrative than the one being insisted on by the Government. But the Government says the ESB must adhere to the Gleeson guidelines, which would only allow for an annual salary of around £105,000, including bonuses. The package originally offered to Mr O'Hara is said to comprise a salary of around £160,000, but is over £200,000 when other elements are taken into account.
Ms O'Rourke said yesterday that she hoped to meet the ESB again and that they would work towards a resolution of the issues. The Minister said she had met the ESB chairman Mr McCann several weeks ago and the issue had been raised then.
Ms O'Rourke pointed out that the Cabinet had decided to defer implementing the Buckley report, but agreed to it raise with the Minister for Finance, Mr McCreevy, who reiterated the Government's position. She met Mr McCann last Friday and told him the situation again.
On Saturday the ESB board met for six hours to discuss the matter and then wrote to Ms O'Rourke to say that it could not go ahead with the appointment because of the Government's insistence on adhering to the Gleeson guidelines.
ESB sources said last night that from the outset, the Department - then called the Department of Transport, Energy and Communications - had been clear that the ESB would be offering a "competitive" package.
"Gleeson does not represent a competitive package," said one ESB source.
It is unclear if Mr O'Hara - an ESB employee - would be prepared to take the Gleeson guidelines salary until the Government approves and implements the Buckley report. An ESB source said that issue did not arise at the moment.
The source said the ESB was one of the most profitable semistate companies, making profits last year of £132 million on a turnover of £1,100 million. Meanwhile, Ms O'Rourke's predecessor, Mr Alan Dukes, said that, by "turning its back on the Buckley recommendations", the Government was putting the situation of semi-state pay right back into "a completely arbitary position".
However, Ms O'Rourke asked why the previous Government did not implement the report when it was in office, as it had four months to do so.
