Vol. 530 No. 3
29 Mr. Stagg asked the Minister for Public Enterprise her views on whether the decision by the ESB board to reject the privatisation of the company is in the best interests of its customers and the future of the economy; and if she will make a statement on the matter. [3883/01]
Policy in relation to State enterprises is set out clearly in the Programme for Government. This provides that the Government, working within the framework of a social partnership approach, will ensure that State companies are equipped to meet the challenges of the developing competitive global market place. Decisions on ownership of State companies are based on a case-by-case consideration of the circumstances of the companies and a determination which best meets the interests of all the stake holders involved. In that regard, the views of the boards are relevant.
In the light of the emergence of competition I considered it important for the ESB to turn its attention to finding the best way to position the company to be successful in the future liberalised environment for electricity.
I wrote to the Chairman of ESB and invited the board to let me have its views on the future direction of the ESB including such issues as alliances, strategic partnerships, structure and ownership. I also encouraged the board and the ESB group of unions to discuss this matter together. There were several meetings and all aspects and options were fully explored and examined. The board of the ESB finalised its position last month.
The board concluded, having taken full account of the submissions from the ESB management and unions that the essential conditions for a successful change of ownership do not prevail at this time. Therefore the board decided it would be inappropriate to proceed with a change of ownership recommendation. The board also decided to urgently pursue with the ESB group of unions, in a spirit of partnership, the development of a comprehensive strategy for the future development and growth of the ESB.
I welcome the efforts taken to date by the board, the management and unions in relation to this important issue. I respect the conclusion arrived at by the board. I am confident that all parties will work together in a spirit of openness and partnership to develop this partnership strategy.
I wish to be associated with the remarks of my colleague and welcome the Minister back. I am pleased to see she is well prepared for the fray.
The Minister will be aware that in November 2000 she issued a statement saying the part privatisation of the ESB was desirable and on 17 January 2001 she made a statement saying the board of the ESB was the best judge of what should happen. Will the Minister agree it is vitally important that the shareholder, namely herself and the Government, being the owners of the company, make the decision. While the advice and opinion of the board and management of ESB might be sought, will she agree that the decision and the policy on the ownership of the ESB should be a primary matter for the Government?
That statement arose out of a radio interview on the Sunday and naturally the newspapers picked up on it. The ESB would be best served by such a partial privatisation. I respect the decision of the board when it said that, as of now, it did not see privatisation as the way forward. The Deputy is correct in saying it is the stake holder that is the Government of the day, who will have the final say on this.
Given the national strategic importance of the ESB, does the Minister agree it would be very undesirable that a company so vital to the national economy would be allowed to be sold to foreign ownership? Will she look again at the policy of part privatisation, which in all other cases has led to full privatisation?
While it had a strategic partner, Telecom Éireann was fully privatised. I remain of the view that partial privatisation is the best route but I respect that the board has taken a decision, which it has conveyed to me. In explaining it the words "at this time" have been used. Therefore, I expect the issue will arise again and in that context I will be open to whatever the company has to say.
Regardless of whether privatisation is partial or full, eventually there is no control over who becomes the owner. A global market place operates and I am aware of the dangers and challenges of that.
Is the Minister aware of the crisis in the electricity market in California, the sixth largest economy in the world? The crisis has arisen because of the breakdown in the supply of electricity due to the logical end product of privatisation, which includes full deregulation. In view of the experience in Los Angeles and California, will she re-examine the policy position outlined in the Programme for Government and reconsider the retention of the ESB in public ownership, with competition?
The ESB has embarked on that. I followed the Californian story. It makes sorry reading for whoever handled it.
