Intensive negotiations are to resume at the ESB this morning on the Programme for Action on Competitiveness and Transparency (PACT). Significant progress was reported in talks in some grades but key groups with the power stations and network technicians still have significant problems to resolve.
It had been hoped to conclude the talks before today's board meeting but it now looks unlikely that the target of beginning a ballot of the company's 8,000 employees on the PACT can begin tomorrow. The company's employees have been offered a 21 per cent pay rise but must accept 2,000 redundancies and deliver cost savings of £100 million a year.
The ESB needs PACT to begin a massive investment to prepare the company for full competition in the energy market from 2005. The board chairman, Mr Tadhg O'Donoghue, is keeping in touch with all the negotiating teams.
As expected, the most problematic area in the talks last night remained the Powergen division, which runs the power stations.
About 1,200 of the redundancies are being sought in this area. Eight obsolete peat-fired power stations in the midlands, Donegal and Kerry are being closed.
The key groups here are the maintenance crews, who include some of the highest earners in the company. The fitters, who can earn up to £80,000 a year, have enjoyed preferential payments for allowing contractors to help with overhauls of power plants.
Extra concessions on contracting out work are now being sought from the fitters, as well as greater integration by them in work teams with electricians, instrumentation technicians and day workers.
Agreement seems close with the other two main groupings in the ESB, the 2,500-strong clerical-administrative grades and the 2,500 network technicians. It was the rejection of an 18.5 per cent increase by technicians in January which threw the PACT talks into crisis.
Like other groups they are now being offered 21 per cent and one of the key requirements in the last package - that they report to site each morning rather than their depot - has been dropped.
The talks are complex, with 200 negotiators, ranging from senior managers to local shop stewards, involved in discussions for 35 categories. In theory it would be possible to start balloting workers in all sections which conclude agreements tonight, but the company is anxious to bring everyone over the line together.
The key question, as one senior source close to the talks put it, is "to balance the need to get an agreement for the sake of an agreement against getting an agreement that works".
There is no doubt ESB union officials and managers are convinced of the need for change.
Last March, the unions argued with the board that the company was not ready for privatisation or competition because of the high cost-base and lack of management expertise.
However, as the difficulty in securing agreements in Powergen and with the network technicians shows, this message has not gotten home to everyone.
Some 40 per cent of the energy market is being opened up by 2003 and the rest by 2005. Failure to achieve cost targets could mean that some of the company's oil-powered stations, such as Tarbert and Great Island, or even the large coal-fired station at Moneypoint, could have shorter life expectancies because it would not be worthwhile to refurbish them.