Seamus Brennan
Ceist:6 Mr. S. Brennan asked the Minister for Transport, Energy and Communications the role, if any, he envisages for subscribers and staff in share-ownership as part of Telecom Éireann's strategic alliance. [17423/95]
Ceisteanna — Questions Oral Answers - Share Ownership of Telecom Éireann.
The mandate for strategic alliance negotiations allows for the issue of up to 35 per cent of the company's equity to an alliance partner.
The mandate also states that subject to certain conditions the shareholder is willing to consider setting aside up to 5 per cent of company share capital for an employee shareholding scheme. Work on setting up this scheme is at a very preliminary stage and the final structure will have to be worked out in the overall context of the alliance and the adoption of a business strategy that will enable the company to thrive in a competitive environment.
In relation to share ownership for subscribers, the strategic alliance mandate makes clear that Telecom Éireann will continue to remain in majority public ownership. In that context the question of further dilution of the State's holding beyond the terms of the mandate is not envisaged.
So that we do not engage in the type of questioning in which we have just engaged on ESAT some months from now, will the Minister indicate clearly to the House the terms of reference and the methodology he will use before he sells off 35 per cent of our largest State company? Will he put those assessments before the House so that we can agree on them because matters are being handled behind closed doors?
The Government agreed a mandate for the conduct of the negotiations after consultations with Telecom Éireann, the unions and all interest groups. The mandate is the document outlining the procedure and the interest of the shareholders and Telecom Éireann in this alliance partnership. I cannot be exhaustive at this initial stage about the key criteria under which the decision on a strategic partner will be based but in broad terms the general strategic fitness of a partner will be important, by that I mean the ability of a partner to bring marketing, technology and marketing skills to Telecom. Partners must also now show a long-term commitment and be in a position to maximise sustainable employment. Equity consideration, representing a fair price for a stake in the company, will also be a factor.
I put it to the Minister that we are heading for a disastrous competition. The Minister may have consulted management and unions but he has not consulted Dáil Éireann or the public who are the shareholders of this company. Have we any options other than the one the Minister is outlining? For example, is there any role for subscribers, the people who built this company over many years in share ownership?
This matter has been the subject of careful examination. All the options were examined and brought before Government. The Government has made a decision and the process is under way. In due course I will, on behalf of the Government, come back to Dáil Éireann and inform its Members of our decision.
The Minister should consult us before he tells us.
The Deputy has had ample opportunity to make public comment. If he wishes to formulate proposals at any time and put them to me I will be happy to take them into account. The Government must make decisions and we have made a decision in the best interests of Telecom Éireann, its employees and the economy to ensure we get a strategic alliance partner for Telecom which will address its weaknesses and build on the strengths it has already clearly established.
In taking on a strategic partner for 35 per cent, will the Minister assure the public that what is in effect a monopoly will not simply be a monopoly owned by two companies and that he will not get the type of competition he is seeking?
My principal objective in this process is to ensure that Telecom Éireann can operate from a position of strength. Ireland is on the periphery of Europe and for that reason alone it is essential to have a modern, up-to-date telecommunications system in place. The success of our telecommunications network establishes, to a large extent, our competitiveness as an economy. That is part of the process and our principal consideration. Because of the level of interest already expressed by international operators in forming an alliance with Telecom Éireann. I have no doubt that when this process is concluded, we will be in a position to move Telecom on to a more successful era and ensure it continues to make an important contribution to Ireland and its economy.