I have considered the content and the portent of Deputy Ryan's amendment but I cannot accept it and I will outline my reasons in that respect.
The borrowing limit, as previous speakers have said, was set 22 years ago at an equivalent figure of €2 billion. We propose to increase it to €6 billion to take into account the dramatic ESB current and forecast financial position.
I do not accept Deputy Stagg's point that there has been no gain for the Irish consumer. For years, Governments of every hue and cry prevented, for political reasons, increases in electricity prices. That was very popular but the reality is that over those decades there was no investment in the infrastructure and, ultimately, the people would be at a significant loss if that was the case. To be fair to Deputy Stagg, he acknowledges that neither the Minister nor the ESB has power in regard to pricing. We passed legislation which gave that power to an independent regulator who is obliged, under law, to give a rate of return to companies investing in this infrastructure.
We hear a good deal about Government stealth taxes but the reality is that this was established by the Oireachtas to allow a fair return for investment in telecommunications or in the energy area. By 2007, the ESB expects that its peak net debt levels will be approximately €4 billion. This is a one-section Bill, taken from the more substantial Electricity Bill to be introduced later in the year. The reason for it is that this is a period in the Oireachtas in which parliamentary time for legislation is much sought after and time is of the essence regarding the ESB's current financial position.
Consumers will be the main beneficiaries of investment in the supply infrastructure. Ireland will not have the same problems of significant black-outs as experienced recently in Italy, the US and the UK. The ESB is investing €5 billion in the supply grid over five years, from 2002 to 2007. Ultimately, the consumer will pay for such investment but will gain the benefit of an electricity infrastructure which will ensure no black-outs and sustain current economic growth. Even though it is accepted that the ESB will be at its peak of net debt levels of €4 billion by 2007, the Government believes it is prudent that extra facilities be given to it. The additional €2 billion will be divided into €1 billion to ensure liquidity and €1 billion for headroom factors. The proposed limit of €6 billion is considered sufficient to cover the ESB for at least ten years, which is the financial forecasting horizon period for the company. Inclusion of the €2 billion on top of the anticipated borrowing level of €4 billion is considered reasonable and prudent. Though the ESB's net debt stands at €1.9 billion, it is rising rapidly and will soon probably go over the existing limit of €2 billion if this legislation is not passed. While the company employs tight management of its cash outflows, the remaining cash balance is nearing exhaustion.
The fundamentals of the Government's energy policy are set out in my Department's strategy statement. This is further informed by the Programme for Prosperity and Fairness, other related Government policy papers and relevant EU developments. It is important to understand the dynamic nature of the energy sector. My Department is involved in ongoing work in developing, updating and refining the detailed elements of its policy regarding the wide-ranging issues that impact on the energy sector.
The Minister of State at the Department of Communications, Marine and Natural Resources, Deputy Browne, explained that the ESB strategic plan takes full account of Government energy policy. The company is revising its five-year corporate plan with my Department to ensure it is in line with Government policy. There is a consultation process in the renewable energy area which will inform the Government when introducing a new policy for that sector. It will be submitted to the Government for approval later this year. I am working alongside my Northern Ireland counterpart, Mr. Barry Gardiner, MP, on the development framework for an all-Ireland energy market. The future of Moneypoint generating station also needs to be speedily resolved.
The ESB has a five-year corporate plan covering 2003 to 2007. The ESB has stated that it is committed to reducing its generation market share to 60% by 2005 to resolve the issue of its market dominance. The privatisation of the ESB is not on the Government agenda. I am opposed to the privatisation of the networks. I have already said that in the event of any future change in the structure of the ESB, selling of the wire would not be on the agenda. The Government believes the ESB is a critical national asset and must remain in State ownership. One thing worse than a public monopoly is a private one. The Government's policy is to ensure the ESB's company structure remains as it is.
While the finances of the company are its own matter, it is required to get annual approval from me as the Minister responsible for its annual capital expenditure budget. Any of the capital expenditure associated with projects abroad, such as in Bilbao in northern Spain and Coolkeeragh in Northern Ireland, require my prior consent and that of the Minister for Finance. The introduction of a borrowing limit of €6 billion for the ESB is prudent and reasonable, particularly when the last time it was amended by the Oireachtas was 22 years ago. Introducing a borrowing limit sufficient for an anticipated ten years is the correct course of action. I cannot accept Deputy Eamon Ryan's amendment.