THE GOVERNMENT has announced it will dispose of up to €3 billion in State assets and companies over the next two years, primarily Bord Gáis’s energy business.
The troika has agreed that up to €1 billion of the proceeds can be used for job creation and investment schemes.
Minister for Public Expenditure Brendan Howlin announced the list of the assets the Government has identified for disposal at a press conference yesterday. The list was agreed by the Cabinet at its meeting this week.
Bord Gáis’s energy business (but not its transmission or distribution systems) will be for sale.
The definitive lists also includes a possible sale of the forestry assets of Coillte and the 25 per cent State shareholding in Aer Lingus, when market conditions are more favourable for the airline.
In a reverse that was well flagged, the previous plan to sell off a significant part of the ESB will not now go ahead. A report commissioned to examine the issue indicated a host of regulatory, legal and practical difficulties.
However, Mr Howlin said some of ESB’s “non-strategic power-generation capacity” would be sold.
He said the Government and the troika had agreed the sales would bring more competition into Ireland’s energy market and would pave the way for a “significant second player, which will be a very attractive [proposition] for an external buyer”.
With Coillte, what may be offered for sale is its forestry assets but not the land it owns. Mr Howlin said Minister for Agriculture Simon Coveney would now examine the options. The State forestry company is valued at between €1.2 billion and €1.6 billion.
Mr Howlin said there would be no fire sale or quick disposal. He instanced Aer Lingus, where the share price is currently €0.94, a value he said was too low.
“We will only sell when there is a fair and good price for the taxpayer. It will take some time.”
He accepted there would be no sales this year, with 2013 being a more likely date. It was also disclosed for the first time that up to a third of the value of disposals could be used for job creation and investment schemes, giving the Government the potential to use up to €1 billion if it realises a total of €3.
Initially the troika had opposed any funds being used in this manner, insisting they be used for debt reduction.
“This very good news from Government perspective is that what seemed impossible a year ago, the utilisation of any State asset, has been resolved after protracted negotiations,” said Mr Howlin.
The list was a final and definitive one, meaning other suggested sell-off targets – such as Dublin Port – were no longer on the table.
Fianna Fáil energy spokesman Eamon Ó Cuív portrayed the announcement as a “three-card trick”. He said the Government claimed it would not be involved in a fire sale, yet its own timetable envisaged sales in 2013, which was the earliest possible date for sales in any instance.
Sinn Féin leader Gerry Adams accused the Government of hiding behind the troika in a decision it was not compelled to make.
“The pattern wherever privatisation has been pursued and profitable State companies have been sold off is one of job losses, increased prices for consumers and big profits for private speculators,” he said.
Clare Daly of the United Left Alliance also claimed the move would lead to job losses.
Minister for Transport Leo Varadkar said the decision not to sell Dublin Port was taken because it was considered a strategic asset.
On Aer Lingus, Mr Varadkar indicated the airline was no longer considered strategic.