The House will be aware from my announcement in February of last year of the overall shape and scale of the State asset disposal programme that is being pursued. In brief, the disposal programme that the Government has agreed consists of:
The sale of Bord Gáis Éireann’s energy business (but not including BGÉ’s gas transmission or distribution systems or the two gas interconnectors, which will remain in State ownership);
The sale of some of ESB’s non-strategic power generation capacity;
Disposal of the State’s remaining shareholding in Aer Lingus, when market conditions are favourable in circumstances that accord with Government transport policy and at an acceptable price to Government;
After further consideration, and having ruled out the sale of Coillte’s land holdings, the Government has also determined that a concession for the harvesting rights to Coillte forests would be proposed for sale.
I am pleased to report that significant progress has been made to-date: Bord Gáis Éireann formally launched the sale process for its energy business, Bord Gais Energy, on 3rd May. The Board of BGE, together with their advisers, are handling the disposal process, in conjunction with NewERA and the Inter-Departmental Steering Group established to oversee the process on behalf of the Government. The transaction is expected to be concluded before the end of 2013.
ESB commenced the sale of some of its non-strategic power generation assets, as announced last October, on 28th May. The sale of the two overseas assets that it announced would be sold – at Marchwood in the UK and Amorbieta in Spain – are both expected to be completed in 2013.
Work is also continuing on planning for the further components of ESB’s disposal package, as announced by the company last October. Details of these further components will be made public by ESB, subject to commercial considerations, in due course.
With regard to Aer Lingus, the European Commission’s recently completed investigation of Ryanair’s bid for the company, and the ongoing investigation by the UK’s Competition Commission, which has now issued provisional findings that Ryanair’s shareholding gives it the ability to influence the commercial policy and strategy of Aer Lingus on routes between Britain and Ireland, have been complicating factors in the disposal of the State’s stake. These matters will continue to be taken into account in the Government’s plans for how to proceed with the disposal of its stake in the company.
At the present moment, however, it is the Government’s view that optimal conditions do not exist for a sale of the Government’s remaining shareholding just now. Nevertheless, the Government remains open to considering opportunities to dispose of its shareholding and will, in the meantime, continue to manage the holding in a responsible manner in order to protect the State's interests and with the aim of maximising its value.
With regard to Coillte, a number of detailed financial, technical and other specialist reports were prepared for Coillte in late 2012 by external specialist consultancy bodies, in full consultation with the Board of Coillte and its executive management. These covered all of the issues that have been raised by various interest groups, including, amongst others, the issue of public access to the forests, replanting obligations to ensure the continued existence of our forests, harvesting policy, the supply of timber to sawmills, as well as the implications for a post-transaction Coillte.
The Inter-Departmental Steering Group established to oversee the Coillte transaction process, which consists of representatives of NewERA, my department and the Department of Agriculture Food and the Marine, has considered these reports and appraised myself and the Minister for Agriculture Food and the Marine of the work completed to-date.
On foot of this analysis, I can inform the Deputy that the Government has agreed with the joint recommendation of myself and the Minister for Agriculture Food and the Marine that now is not the appropriate time to proceed with the sale of harvesting rights in Coillte, but instead the focus needs to be on the restructuring of Coillte as a company, to address the issues that were identified in the reviews undertaken. To that end, I wish to further inform the Deputy that:
Coillte is to undergo a fundamental restructuring, to be overseen by NewERA and the relevant stakeholder Departments, which will include operational streamlining, financial de-leveraging and a critical examination of the disposal options for its non-core activities such as telecoms and wind.
A robust analysis will also be carried out to evaluate how to give effect to a beneficial merger of Coillte with Bord na Mona to create a streamlined and refocused commercial state company operating in the bio-energy and forestry sectors, as committed to in the Programme for Government.
A priority in this regard will be the annual delivery of a material financial dividend to the State by Coillte.
And finally, we intend to fill the significant number of vacancies that will arise on the Coillte board this year by persons with relevant experience and commercial expertise to drive the restructuring process and the merger with Bord na Mona if this is approved by Government.