The sale of Bord Gáis’s energy business will form the main part of the Government’s €3 billion disposal of State assets and companies over the next two years.
Minister for Public Expenditure Brendan Howlin this morning announced the list of the assets that the Government has identified for disposal, in line with its agreement with the EU-IMF troika.
Bord Gáis’s energy business will be put up for sale as part of a process that could see a new player emerge on the Irish energy market. Bord Gáis’s gas transmission and distribution systems and the two gas interconnectors will remain in State ownership.
In a major reverse, Mr Howlin also announced that the Government’s previous plan to sell off a substantial part of the ESB will not now go ahead. A report commissioned by Government flagged major regulation, legal and practical difficulties. He said this morning that some of the ESB’s “non-strategic power generation capacity” will also be sold.
Speaking at a press conference at his department, Mr Howlin said consideration will be given to the sale of some assets of Coillte - excluding the sale of land - and of the State’s remaining 25 per cent stake in Aer Lingus when market conditions are favourable and the Government can get an "acceptable price".
He said there would be no firesale or quick disposal of the State assets. “There’s no deadline. This is a complicated, difficult process. We’re doing this in a measured and careful way,” he said. “Nothing will be sold unless it presents good value, fair value for the taxpayer.”
He said the current Aer Lingus share price is 94c, which he said was too low a value at which the Government could sell.
Government negotiators achieved a significant breakthrough with the troika in January. After what Mr Howlin described as “protracted negotiations”, the troika agreed that some of the funds used could be used for job investment purposes.
Mr Howlin said this morning that a third of the value could be used, giving the Government the potential to use up to €1 billion if it realises a total of €3 billion through the sale of the assets.
The Minister said the next step was that he would report to Cabinet at the end of March with a final valuation on all the assets. He would not set a deadline for when the assets would be sold, citing market conditions as a determinant.
He did say that the list was a final and definitive one, meaning that possible sell-offs such as Dublin Port are not on the table. “What’s not on the list is not on the list,” said Mr Howlin.
Speaking in the Dáil today, Taoiseach Enda Kenny said the Government’s objective was to reach the disposal of State assets at the appropriate time while securing the best possible price.
In a statement today, Bord Gáis said the announcement would have no impact on customers. "Bord Gáis will now engage with the relevant Government departments and other stakeholders to support and input into this process to ensure that the sale of Bord Gáis Energy, when it comes to market, will generate the maximum value to the State," it said.