This week, Eircom, a former State company now chaired by the distinguished former EU commissioner and current Fianna Fail grandee Ray MacSharry, will come under intense scrutiny at its a.g.m. The unhappy experience of the company's shareholders (myself included) should serve as a potent reminder that the current fad for privatisation ought to be treated with some scepticism. In spite of all the assurances to the contrary, Eircom has merely proved the truism that the fat cats get the cream.
In an atmosphere where the Government is even planning to emulate the disastrous privatisation of the rail network in Britain, the pain and disillusionment of Eircom shareholders should provoke a pause for thought. This just might be a good time to say something profoundly unfashionable - that there is a continuing need for strong, responsive and accountable publicly owned companies.
One of the best ways to illustrate that need is to look at another firm chaired by Ray MacSharry, the State-owned forestry company Coillte which raises fundamental questions about the relationship between the privatisation culture and the public interest.
Coillte is a State company, but one that is being prepared for privatisation. Almost everything it does is shaped by the need to maximise profits so that it can be sold off. That drive for short-term profit has been, frankly, a calamity. Even though, in theory, the company is owned by the Irish public, the long-term interests of citizens have been increasingly marginalised. The result is the worst of both worlds: bad politics and bad economics.
When it was established in 1989, Coillte inherited the State's public forests and with them a major part of the natural environment. Yet its record of preserving and enhancing that environment is remarkably poor. Endless rows of low-quality conifers like Sitka spruce are ugly, damaging to rivers and lakes, and an arid habitat for wildlife. To avoid such blight, it has long been Government policy that 20 per cent of new trees should be broadleaves.
Yet Coillte has made no real effort to reach this target. In 1989, 59 per cent of its forests was made up of Sitka spruce. By last year, the proportion had risen to 68 per cent. Currently, only 5 per cent of what Coillte plants is broadleaves.
There are, at the same time, huge concerns about Coillte's use of its resources. The most disquieting example is what has been happening at Lough Muckno in Co Monaghan. The Hope Castle Demesne, one of the most beautiful parts of Ireland, is owned by Monaghan County Council and Coillte. It was to have been developed as a regional park for public use. Yet it has been leased very cheaply to a London-based property consortium, Harringbrook. This company intends to build a golf course and 88 chalets on Coillte land at Concra Wood. Effectively, the wood is being privatised over the heads of the public so that a private consortium can sell chalets to wealthy golfers.
EVEN more starkly, Coillte's identity crisis about whether it is a public or a private concern has plunged it into a potentially disastrous financial nightmare. According to its latest annual report, published in May, Coillte expected to receive £37.3 million from the EU. The money was to come from a fund established in 1993 to compensate farmers for loss of income while they were waiting for forests planted on their land to mature. So far, Coillte has received £6.5 million under the scheme and annual payments were expected to continue until the year 2013. But as Patrick Smith revealed in this paper last June, the money is not going to turn up. In fact, the grants already paid are being clawed back by the EU.
This is an extraordinary mess and it threatens Coillte's viability. In his chairman's report, Ray MacSharry wrote that the loss of the EU money would be a "very serious matter indeed" because the company had "borrowed certain amounts which were to be serviced from the premiums receivable into the future". Like Captain Boyle in Juno and the Paycock, Coillte has been spending freely in anticipation of a legacy from a rich relative and now finds there is no legacy after all.
What happened is quite simple. The EU grants were intended for private farmers. That Coillte is not a farmer should have been fairly obvious. That it is not a private entity should have been equally clear. Yet, as recently as the current annual report, Coillte continued to maintain that "the directors do not believe that the company is a public entity". Given that Coillte is a publicly owned company whose only shareholders are the Ministers for Finance and the Marine and Natural Resources, this is a baffling belief. And, quite properly, the EU Court of Justice refused to accept it. Thus the exclusion of Coillte from the grant scheme.
But in their own way, Coillte's rejected claims are depressingly eloquent. Here we have it in black and white that a company supposedly owned by the public is not, in the view of its directors, "a public entity". The privatisation mentality has gone so far that the keepers of an important State asset and of key parts of the Irish environment no longer regard themselves as part of the public realm.
No one wants to return to the old bureaucratic mentality that governed the semi-State sector. But that doesn't have to mean that the only alternative is a complete surrender to market forces and short-term profits. A company would be far better, and probably far more economically sustainable in the long term, if it were managed in the public interest.
There is, after all, such a thing as creative, accountable, sustainable and socially responsible public enterprise. Following blindly in the footsteps of Margaret Thatcher is not the way to achieve it.
fotoole@irish-times.ie