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Sale of State Assets

Dáil Éireann Debate, Thursday - 27 September 2018

Thursday, 27 September 2018

Questions (70)

Barry Cowen


70. Deputy Barry Cowen asked the Minister for Finance the location the proceeds from the sale of Bord Gáis currently lie in view of the fact that €10 million is allocated per year for a pilot scheme on social housing; the rate of return these proceeds are earning; and if he will make a statement on the matter. [39276/18]

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Written answers (Question to Finance)

There is an obligation under Article 11 of the Constitution to pay moneys due to the State in to the Central Fund unless there is a law stating that they can be paid somewhere else.

The special dividends related to the sale of Bord Gáis can be divided into two categories:

(i) As the Deputy will be aware from a number of previous PQ responses to him on this issue, the €648 million in net proceeds from the sale of Bord Gáis is being paid by way of special dividends from Ervia to the Exchequer, based on a payment schedule agreed with Government in order to maximise the potential to use the funds in a manner which is efficient from the point of our general government balance.

(ii) Payment of additional special dividends by Ervia to the Exchequer of €330 million over time, where the debt originally associated with the Bord Gáis Energy business that was repaid from the sale proceeds is effectively replaced over time. These payments, which commenced in 2017, are expected to continue for around 20 years and are being utilised by Government to support additional activity in its housing programmes. Such housing programmes are a matter for the Minister for Housing, Planning and Local Government.

The annual rate of return on the amounts that have been transferred to the Exchequer to date would be equivalent to the cost of issuing debt instead of utilising these funds for expenditure on public services. This cost has been approximately 1% per annum for recent debt issuances. The annual rate of return for the funds that remain to be paid by Ervia would be the return earned by Ervia.