GOVERNMENT policy on the ESB "is falling apart", the Fianna Fail spokesman on transport, energy and communications, Mr Seamus Brennan, has said. He was responding to a report in the Irish Times that the company could be excluded from bidding to build new power stations by flaws in proposed legislation.
There was no comment from the ESB on the problems which have arisen with proposed legislation to regulate competition in the electricity business. It is understood the Attorney General, Mr Dermot Gleeson SC, has advised the Minister for Energy, Mr Lowry and his Department that the legislation could be open to challenge under EU competition rules.
The Minister opted last June for a system under which the independent power procurer would operate through an ESB subsidiary. Even though procedures would be put in place to ensure the procurer's autonomy from the ESB, it is understood the system might be open to challenge from "ether power companies.
The Government proposals could lead to a situation where the ESB would be responsible for regulating the energy market but unable to bid for contracts itself.
"The Minister is not thinking problems through," Mr Brennan said. "I think even the board of the ESB does not think that the power procurer should be part of the company.
He added that the company, and the Minister, "knows it can be a player and referee at the same time."
The ESB and its group of unions were only notified of the problem late last week. It threatened to derail the £270 million Cost and Competitiveness Review (CCR) which is about to go to a ballot among the ESB's 9,400 workers. Although the ESB unions finally agreed to endorse the CCR on Monday, it was on the understanding that the problems raised by Mr Gleeson were urgently addressed.
The ESB itself, which had previously been urging the unions to endorse the CCR, has still to do so and is thought unlikely to "sign off" on the final document until the situation is clarified.
Meanwhile, Mr Lowry has taken steps to put in place an independent group of consultants to adjudicate on the new £85 million peat fired power station planned for the east midlands. If the station is not completed by 1999, it will forfeit £21 million in EU funds.
It would be attractive for the Government to allow the power procurer to operate under the auspices of the ESB because the company would then be liable for any damages that might arise for decisions of the procurer.
On the question of finding a strategic partner for Telecom Eireann, Mr Brennan said Mr Lowry, should rethink his strategy now that "seven of the biggest players in the world have left the itch". It was unrealistic for the Government to look for up to £500 million from the remaining three bidders; and he questioned the wisdom of spending £3 million on consultants to pick a partner from among them.
