Vol. 464 No. 3
12 Mr. B. O'Keeffe asked the Minister for Transport, Energy and Communications if he intends to proceed with the sale of 35 per cent of Telecom Éireann in view of the closure of the bids process; if he will accede to the request of the General Secretary of the Communications Workers Union for the staff of Telecom Éireann to get a 10 per cent share in the company; and the current position regarding the strategic alliance process. [8234/96]
In the first instance I should clarify for the Deputy that the bid process has not closed. Two preliminary bids have been received and evaluated, in accordance with predetermined criteria, by representatives of my Department, the Department of Finance, Telecom Éireann and the advisers in the strategic alliance process.
On the basis of this evaluation, the Government has decided that both of these proposals should be admitted to the second stage of the process which has already commenced and which involves detailed negotiations with both bidders and any other parties who may join them in a consortium. This process will ultimately lead to the submission of final binding bids.
In relation to employee shareholding the Government in its mandate for the strategic alliance stated its willingness to consider setting aside up to 5 per cent of the share capital of the company for this purpose. Preliminary work is under way within Telecom Éireann and my Department on the establishment of such a scheme in the context of the restructuring of the company.
It makes sense that the employees of Telecom are given the opportunity to partake in the company's future prosperity. However, the implementation and success of any such scheme will depend on the extent to which agreement and consensus can be reached on the way forward for Telecom.
Given that eight out of the ten players who expressed an interest in a strategic alliance with Telecom Éireann have withdrawn their names and that the Minister is on record as valuing the 35 per cent stake in the region of £500 million, will he confirm that the best offer on the table is less than £300 million? Will he, therefore, agree that the time involved in putting the alliance together — he has had almost two years in which to do so — has been prolonged and used unproductively, which is not in the best interests of Telecom Éireann, with the result that we are left with two suitors who would be regarded as regional rather than top class international interests?
The Deputy is showing an alarming lack of appreciation of the importance of this process and of the necessity to deal with it in a sensitive manner. We are talking about the future of Telecom Éireann and its employees.
That is why we are so concerned.
The Deputy should be aware that it is not possible for me to negotiate publicly on any aspect of it, but I can inform him that we have moved from phase 1 to phase 2. The purpose of phase 1 was to identify parties which would head-up consortia and which made preliminary proposals that would qualify them to move to phase 2. The purpose of phase 2, now under way, is to choose one of these parties after a process of negotiation and final binding bids.
The alliance process timetable is running to schedule and my objective is to conclude it before the summer recess. We are entering, perhaps, the busiest period of the critical path. We have entered what is, essentially, the nitty gritty stage of the process. For the month of May there is not one day without scheduled meetings involving the company, the Department and potential partners.
Given that he is now dealing with two consortia, out of ten originally, one of which would be regarded as extremely minor on the international scene while the other would have some standing — there are varying views as to its importance — and that there is a devaluation of the value of Telecom Éireann, will the Minister accept that we are involved in a charade and looking after his interests rather than those of Telecom Éireann because we will not get the best possible value out of this competition? The two prospective partners would not have been considered the most eligible groupings for a strategic alliance with Telecom Éireann when the process was initiated.
The Deputy obviously has a crystal ball if he can determine that it will not be a success. I am surprised that he is attempting to prejudge it or make such a profound announcement in view of his lack of knowledge of the process and what is happening.
I am concerned that the major players have withdrawn their names.
I am sure that KPN Telia, a member of the Unisource Group, and TeleDenmark would not take too kindly to the insults the Deputy has hurled at them.
The Minister has made a major contribution to this, given the way he has been dealing with Esat Digifone in the granting of the mobile telephone licence.
Deputy O'Keeffe asked some pertinent questions. He ought to be courteous enough to listen to the reply.
The Deputy should withdraw the insults he has levelled at the competence of KPN Telia and TeleDenmark, two companies of international repute and highly successful in the field of telecommunications. It is that type of comment from the Fianna Fáil benches——
Would they have been the Minister's first choice?
——which is serving to undermine the process. It is attempting, for political reasons, to endanger it.
The person who has undermined it is the Minister.
We have two strong bids from KPN Telia and TeleDenmark and are now in the negotiating stage. As late as last Saturday my officials and I had an indepth meeting with my advisory team working on the alliance issue. We are satisfied with the calibre of the two parties whose bids have qualified them to head up the consortia as part of phase 2. This leaves the door open to other parties to participate as part of either consortium. The intention is to advance the process, on schedule, to a conclusion. The advisory team is fully aware of the need to balance the financial and strategic considerations in the process.
The Minister said that the Fianna Fáil Party is more interested in political gain than in the interests of Telecom Eireann but that obviously is untrue. It is concerned about the mismanagement of the issue by the Minister. When he entered office he was full of vim but, he unfortunately lost the wind from his sails very early on. Is he concerned that we have lost the major international players who in the intervening two-year period have involved themselves in other strategic alliances? It is a major source of concern for us on this side of the House in terms of the future of Telecom Éireann. The question being asked is how well the Minister has handled this matter.
The Deputy has made the point very well for me. I am slightly surprised that he has reflected on my predecessor and his ineffectual Ministry.
That is a disgraceful statement.
The Deputy is as well aware as I am that there was a logjam and that nothing was done about it and that the process was not advanced until such time as I entered the Department. In 14 months I have done more to bring the process to a conclusion than the Deputy and his colleague when in Government.
We are left with two out of ten.
The process is on track and negotiations are proceeding. The Deputy and his colleagues are anxious at every opportunity, for political reasons, to attempt to throw a spanner in the works, but they are dealing with a major national asset, Telecom Éireann, which is a crucial part of our national infrastructure. He is speaking about the livelihood and future of thousands of employees.
That is why we are so concerned about the way the Minister has mishandled the matter to date.
He should be very careful and much more cautious and not make the kind of intemperate comments coming from the Opposition benches on a regular basis.
That is why we are so concerned.
I appeal to the Deputy and to his leader to be a bit more responsible. Everybody has a role to play in Opposition, but he should not be reckless and irresponsible in his comments.
That is ironic, given the Minister's past.
