A few weeks before Christmas I attended with the Taoiseach a presentation by MSF union on the general history of ESOPs and employee share ownership plans. I understand that the Taoiseach and I were the only two public representative present. The Taoiseach made some interesting comments about the operation of ESOPs and the role they play in the US in encouraging partnership, especially at factory and company level and the role they could play in the social partnership. He looked forward to their development in this country.
Before the general election Deputies interacted closely with their constituents, some of whom work in Telecom Éireann and are members of the Communication Workers' Union. At that time the Taoiseach and the Tánaiste made an explicit written promise to the workers of Telecom Éireann, including those in my constituency and on whose behalf I speak, that they would fully honour the proposal to have an ESOP of 14.9 per cent of the restructured Telecom.
The target date was 31 January yet we are now approaching the middle of March without agreement. I understand from today's newspaper that the company has been valued by the Minister's valuers, Morgan Stanley, at approximately £2.4 billion. On that basis and given the 9.9 per cent outstanding employees share ownership, the employees would need to raise approximately £240 million. On the basis of that valuation it would appear that a deal is not possible if we cannot advance the situation. Coopers and Lybrand on behalf of Telecom Éireann and Keelin on behalf of the Communication Workers' Union have valued the company at approximately £1.5 billion. With the surrender of the worker's bonus over the next number of years and with capitalisation of their pensions they will have to raise approximately £50 million, which they are prepared to do.
The Minister and the Taoiseach referred to the basis of securing a fair price from the employees for this shareholding in their company. It appears to me and my constituents who are Telecom Éireann workers that the £1.5 billion valuation is a fair price. However, an advance could be made even if an amount midway between the Morgan Stanley, Coopers & Lybrand or Keelin valuations was adopted.
The home of ESOPs is the United States. It has operated there extremely successfully in many brilliant companies. Special concessions are given to companies which introduce an ESOP involving deductible income under the taxation system. If the Minister is not prepared to consider a fairer price for the employee shareholding, will she consider, in conjunction with the Minister for Finance, Deputy McCreevy, an addition to the Finance Bill? This would enable a settlement to be reached under which the employees' contribution would still be approximately £50 million.
Many of my constituents who are proud workers for Telecom Éireann are exasperated at this stage. The Minister has been working on this issue for the past nine months and the Taoiseach and the Tánaiste and Minister for Enterprise, Trade and Employment have made strong commitments on it. However, it has not been finalised and the workers want to know when the issue will be advanced and a deal will be cut. The Minister has an opportunity in the context of social partnership, to which the Labour Party and I hope the Government is committed, of bringing forward a fair partnership in this company between the employees and management. As we face an era of restructuring in which there will be significant change in the telecommunications area, the Minister has an opportunity to build a main plank in social partnership. She would then have the distinction of being the Minister who brought about the first major ESOP deal in the public sector and laid down a formula for the future development of partnerships in Ireland. I urge the Minister to conclude the deal as soon as possible and to put to rest the fears of my constituents.
