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The Minister for Finance, Brain
Lenihan, on Thursday announced the establishment of a special review group, to examine
State commercial assets and liabilities and to advise him on how the assets can be better
used or disposed of to support economic growth and national investment
priorities.
The group has begun its work and
will focus at the outset on assets and liabilities in the commercial state
sector, examining the potential of what Lenihan termed "this important part of the economy to
stimulate job creation and support broader economic recovery." The Minister said
an interim report will be provided to him before the end of the year. As part
of the review process, all relevant stakeholders will be consulted and
submissions from the public and interested parties will be sought.
The Minister
has appointed economist Colm McCarthy of University College Dublin as chair of
the group. McCarthy had chaired the so-called Bord Snip Nua group which in
2009 recommended targeted spending cuts of over €5bn. The other members of the
new group are Donal McNally, Second Secretary General
Department of Finance, and Alan Matthews Professor of European Agricultural
Policy at Trinity College Dublin. Commercial bodies that will be the focus of
the review include ESB, Bord Gáis, RTÉ, Iarnród Éireann, Dublin, Cork and
Shannon airports, (all owned by Dublin Airport Authority) 10 port companies and
Bord na Móna.
Existing workers have shares in
some of these companies and while unions will likely resist a change in
ownership because of the high pay and pension benefits available for staff,
privatisation could benefit both the State and workers. Many of the companies
have big pension deficits e.g. Bord na Móna's €20m deficit.
The ESB and Bord Gáis
could fetch up to €10bn but at the MacGill Summer School in Glenties, Co. Donegal,
Green Party TD and Energy Minister, Eamon
Ryan, said his party would not support the plans: "This assumption that
private is necessarily going to be better, I don’t buy into that... We
have lessons, such as what happened to Eircom. It’s only settling back
now after 10 years of chaos by being thrown to the private sector."
From the early 1990s, sales of Irish State-owned commercial enterprises
raised over €8bn, and the privatisations included the sale of Greencore,
TSB Bank, ACC Bank, Eircom, Irish Steel and the partial sale of Aer Lingus.
The following
Terms of Reference have been set out for the review:
To consider the potential for asset disposals in the public sector,
including commercial state bodies, in view of the indebtedness of the State;
To draw up a list of possible asset disposals;
To assess how the use and disposition of such assets can best help restore
growth and contribute to national investment priorities; and
To review where appropriate, relevant investment and financing plans,
commercial practices and regulatory requirements affecting the use of such
assets in the national interest.
These include, inter alia,
radio spectrum allocated for broadcasting and telecommunications; carbon
emissions permits; and mineral, hydrocarbon and other licences issued by the
State.
