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News : Irish Last Updated: Feb 22, 2012 - 2:01 PM

Irish Government agrees with EC-ECB-IMF troika on sale of State assets up to value of €3bn
By Finfacts Team
Feb 22, 2012 - 1:56 PM

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The Ardnacrusha, Co. Clare electricity generating project on the River Shannon, commenced in 1925 and it cost the young Irish State over 20% of its annual budget of £25m. The powerful trade unions at the State-owned Electricity Supply Board successfully resisted a sale of a stake in the company that has the highest pay scales for job type in the economy.

The Irish Government has agreed with the EC-ECB-IMF troika on the sale of State assets up to a value of €3bn based on "the guiding principles that there will be no firesales. Integral transmissions and distribution systems will be retained in State ownership and full value will be derived for the State."

The Government said today that it has agreed the shape and scale of the asset disposal programme to be pursued as a commitment under the EU/IMF Programme, and as provided for in the Programme for Government. Minister Brendan Howlin on welcoming the decision said:: When we came into Government, the position was that no money from the disposal of assets could be spent on anything except reducing our debts I am pleased that following intense engagement the troika has agreed that one third of the proceeds can be used for re-investment in to our economy. This is a substantial change to the Troika’s previous position and will help promote recovery in the economy.”

Following detailed analysis which identified a range of complex regulatory and legislative issues the Government has decided not to proceed with a sale of a minority stake in ESB as previously signalled.

Instead, the Government has decided that alternative asset disposal options will now be pursued, to include the sale of:

  • Bord Gais Eireann’s Energy business (but not including BGE’s gas transmission or distribution systems or the two gas interconnectors, which will remain in State ownership);
  • Some of ESB’s non-strategic power generation capacity;

Consideration will be given to the sale of some assets of Coillte (excluding the sale of land) and the sale of the State's remaining shareholding in Aer Lingus when market conditions are favourable and at an acceptable price to Government.

In relation to ESB, the Government said it reaffirms its commitment to the retention of ESB as a vertically integrated utility in State ownership as at present, notwithstanding the decision to dispose of some of its non-strategic power generation capacity.

The reality behind this statement is that the Government did not wish to confront the powerful trade unions in the main power utility in the State. 

Howlin said work will now proceed on progressing plans for the disposal of these assets, which will involve all the relevant Departments overseen by the Department of Public Expenditure and Reform and with the assistance of NewERA, with the objective of identifying by end-March any remaining policy, regulatory, legislative and/or financial issues that may need to be addressed prior to disposal. "It is intended that any issues arising will be addressed by the end of 2012 in order to facilitate transactions commencing in 2013."

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