Thursday, 18 April 2013

Ceisteanna (5)

Mary Lou McDonald

Ceist:

5. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will provide details of the State assets that he intends to dispose of in 2013. [18002/13]

Amharc ar fhreagra

Freagraí ó Béal (12 píosaí cainte) (Ceist ar Public)

I expect that the Bord Gáis Energy sale transaction will be formally launched in the coming weeks and that it will be completed by the end of this year. I further expect that the sale of two of ESB’s overseas assets - at Marchwood in the United Kingdom and Amorbieta in Spain - will also be completed this year.

I like to believe that when the Minister came to office - this may be wishful thinking on my part, but perhaps he will indulge me - he would never have imagined himself as being responsible for butchering the public service, for protecting the people at the top of that service in a very calculated and deliberate way or for selling off State assets. I am sure he will concede that Bord Gáis is a very successful company. It is self-financing and - in common with the ESB - it has consistently returned a dividend to the State. By any standard, the energy sector is both sensitive and strategic in nature. I imagine the Minister and I can agree on that fact. I am of the view that the Government is making a very big mistake in selling off Bord Gáis Energy. This is a decision it will live to regret. The great value of energy utilities is the fact that they are integrated entities.

Will the Deputy please ask a question?

That is part of their value. The Minister indicated that the sale transaction will be formally launched in a couple of weeks and that it will be completed by the end of the year. Will he inform the House of the extent to which he has engaged in discussions with the unions which represent the employees of BGE? The Minister did not refer to Coillte. Is this an indication that the sale of the harvesting rights to Coillte lands is off the table, or has it been delayed? I presume the sale of those rights is not going to proceed this year.

The Deputy again asked a number of questions and she prefaced them by revisiting past issues and making assertions which are profoundly untrue-----

So that to which the Minister referred was his plan all along.

-----in respect of my protecting the highest paid. The Deputy knows these things and she plays her particular game. I will deal with the specifics of this matter. If one considers the position objectively, one will realise that the notion that selling the energy division of Bord Gáis is butchering the assets of the State is fanciful. There are two large energy companies in State ownership in this country and these compete with each other on a notional basis. The larger of the two, ESB, was not permitted to benefit from an energy cost reduction and the purpose of this was to create an artificial market with another State company. That was what passed for competition in the past. It is my opinion that the consumers and workers of Ireland who depend on and want affordable energy would be happier if there was real competition between an external player and a robust, lean ESB, while Bord Gáis concentrated on its gas pipelines, which is what it was established to do in the first instance. Bord Gáis is a very successful company. Its expansion into certain areas - running wind farms, etc. - was never envisaged when it was established.

Does the Deputy believe that a power station in Spain is an essential part of the assets of a company such as ESB, particularly at a time when the State needs financial resources in order to invest in job creation? She will be aware that I have renegotiated the troika agreement to ensure that the financial resources that will be leveraged from the sale of these assets will be invested in job creation. If I do not have time now, I will refer to the position with regard to Coillte when replying to the Deputy's next supplementary.

The Minister is engaging in a degree of historical revisionism in the context of energy prices within the State. Those prices shot up as a result of the adoption of a European Union directive that insisted upon deregulation of the market. The Minister is correct: those prices were increased to artificially high levels and then maintained in order to make what is a very small market alluring to major players. This is because we do not have the same economies of scale that obtain in larger continental countries. That is done, however, and the issue that now arises is whether the Government, on behalf of the people, is going to maintain in State ownership assets in strategically important areas. The energy sector is one of the latter. Before he listed what he intended to flog off, the Minister used to say that only so-called non-strategic assets would be sold. He really laboured that phrase. I am really struggling to understand - despite the standards they have kept while in government - how any Labour Party representative in his or her right mind could describe the area of energy as anything other than utterly strategic. The Minister is, however, clearly not open to my view in this regard. How much does he expect to realise from the sale of Bord Gáis Energy and the two ESB power plants in Spain and England?

The first part of the Deputy's question relates to revisionism. I was referring specifically to the domestic market here-----

The changes to which were driven by EU law.

-----and the artificial competition that was created on foot of a decision by the then Government to prevent one State company from competing with another in order that it might build up an asset. There was a ridiculous situation whereby people were paid a premium to switch from one State company to another and when a critical mass was reached, they were given a further premium to move back. That was an odd way to encourage competition.

The biggest asset to which the people of Ireland require access now is investment in jobs. It is all about jobs, jobs, jobs. We require capital in order that we might invest in job creation. That is what we want to unleash from the meagre resources at our disposal. We have been very discerning in the context of what we have put on the market. We are protecting the transmission lines and, as promised, we are also protecting the ESB as an integrated company. There is no sale of strategic assets.

We are selling off some of the power generating capacity of a State company that will now focus on gas and take on a new responsibility in the form of Irish Water. We are also selling off the overseas assets of an energy company because we need money to invest in our economy, not that of Spain or the UK.

How much will the State get?