McCarthy says State assets unlikely to be sold in immediate future

McCARTHY PRESS CONFERENCE:UCD ECONOMIST Colm McCarthy said yesterday he does not expect to see State assets being sold in the immediate future.

Mr McCarthy chaired the three-man Review Group on State Assets and Liabilities, whose report was published yesterday.

Speaking at a press conference to mark the publication of the report, Mr McCarthy said that while there should be a programme of asset sales to reduce the State’s high level of indebtedness, it was unlikely or even prudent that this would happen anytime soon.

“The Government isn’t under any immediate financial pressure, in the sense that the IMF-EU programme is in place, which means that the Government should be funded for the duration of that programme,” said Mr McCarthy. “We are not suggesting that all of these companies could be put up on eBay tomorrow. It’s a process that takes six months or 12 months or longer.”

Mr McCarthy said the review group had decided against putting valuations on individual assets in the report because the value of assets ultimately depended on what a buyer would pay for it.

“Waiting around for 2006-7 bubble prices to return probably means waiting forever.

“We think it’s a waste of time guessing what realised prices might be.”

Mr McCarthy said that, like every other company in the country, State-owned firms were facing a difficult trading environment.

He said that in addition some had large capital programmes, significant pension fund deficits and had made big acquisitions, all of which would impact on their potential value to investors.

The economist denied suggestions he was recommending the total sell-off of the semi-State sector.

He also said that despite the economic situation, he did not think the recommendations put forward by the review group would have differed substantially if the report was written five or six years ago.

“There’s always a perception that the State balance sheet is getting pretty stressed and we ought to be looking at non-core assets that can be disposed of.

“This was held a long time before the IMF-EU programme was implemented,” he said.

“I’m not sure we would have said anything different previously in the sense that a lot of the companies we are suggesting should be privatised are already competing with privatised companies,” he added.