Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Question 33: To ask the Minister for Communications; Energy and Natural Resources if he has considered the recommendations of the McCarthy Report on State assets and liabilities regarding companies under his responsibility; and his response to those recommendations. [15913/11]

Pat Rabbitte (Dublin South West, Labour)
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I am currently considering the recommendations of the McCarthy report on State assets and liabilities regarding companies under my responsibility and will forward my views to the Department of Public Expenditure and Reform in the very near future. I expect that the Minister for Public Expenditure and Reform will consider the responses of all affected Departments and bring proposals on the report to Government in due course.

It is accepted that the acute current and foreseeable fiscal situation facing the State demands that all measures that can assist in this regard be examined. There is no doubt that the McCarthy report is a comprehensive overview of the issue and its recommendations merit serious consideration. The study and recommendations of the review group encompass very significant areas of responsibility for my Department. Of the 16 commercial State bodies referred to on page 2 of the review group report, eight are under the aegis of my Department. In addition, the report also dealt extensively with regulation, and three regulators - ComReg, the Commission for Energy Regulation and the Broadcasting Authority of Ireland - are also my responsibility.

While I do not propose at this juncture to comment on specific recommendations, I strongly support the view that consideration of the sale of State assets should be set in the context of the wider public interest, including sectoral and economic policy and not simply as a revenue raising exercise. The report strongly recommends against a fire-sale of assets and underlines important complementary policy initiatives, which it concludes must be progressed in advance of sale of certain assets.

More generally, any disposal of State assets, especially those in the ownership of commercial State companies, must be undertaken on a fully informed basis and consistent with wider sectoral policy in the area. This must include best practice valuation of the asset, which it is proposed to sell, assessment of the impact of such a sale on Government policy objectives in the areas in question, appropriate consultation with stakeholders, and, in the event that disposal is deemed appropriate, timing of disposal to maximise value for the owner.

Additional information not given on the floor of the House.

Turning specifically to the energy State companies, the importance of the electricity and gas infrastructure and supply chain to national economic and social development cannot be emphasised strongly enough. Electricity and gas are the lifeblood of economic production in the high-tech ICT sector, the employment-intensive services sector and indigenous sectors such as farming. They are also fundamental to key social services such as health and education.

Because Ireland has such a reliable and relatively modern electricity and gas infrastructure we almost take it for granted. We must always remember that the creation of a modern and reliable energy networks system did not happen by accident. It arose from extensive and well executed investment by State owned companies, notably the ESB and Bord Gáis. These investments were funded without recourse to the taxpayer but on the back of well run and profitable State companies, which have garnered the trust of the capital markets to enable them to raise the necessary funding.

Good regulation, and professional management and operation of the transmission network by EirGrid have further contributed to our excellent networks infrastructure and the introduction of strong competition in the generation and supply business. The overall outcome is a modern electricity and gas sector and an evolution to average EU prices from a position where Ireland used to be well in excess of the EU average.

The importance of the electricity and gas sectors to economic and social development place the sectors in a unique position in the context of public policy and the national interest. Important issues in these sectors will fall to be addressed by the Government in the medium term. These arise in part from the report on the sale of State assets, about which the Deputy has posed his question, but more significantly, from EU legislative requirements and developments. We must prepare for the development over time of a pan-European energy market served by interconnection. Ireland will be a small part of a very large European regional electricity and gas market. This inevitable development must strongly inform energy policy, including that relating to ownership and structure of State energy companies.

Given the importance of the sector to the very economic and social functioning of the State, the State must continue to have a strong and direct presence in generation, networks and supply. This must be done in a way that protects overall economic competitiveness and does not deter private sector investment in generation and supply. This approach does not preclude extracting value from the strong and profitable State companies that we have built. The process of extracting such value and implementation of any other structural change within the State energy sector must meet the test that they are in the public interest in its widest sense.

The review group also proposed the sale of RTE Networks. This company is a key player in the major task of switching over to digital terrestrial television and switching off the analogue system. This is a hugely important project to be completed by 2012. I would not wish to see this timeline endangered by fundamental structural change.

The report also makes a number of other recommendations which impact on areas of my Department. I will give all recommendations serious consideration and make my specific views known to Government in the first instance.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Does the Minister agree that the sale of public assets which have been built up over generations of investment by taxpayers into leading successful entities, both economically and socially, would represent not only a very short-sighted approach but have disastrous consequences for workers and for the provision of services? Is the Minister prepared to resist the more radical proposals in the McCarthy report that favour extensive sales of assets and the preparation of key companies for eventual privatisation, in whole or in part?

Pat Rabbitte (Dublin South West, Labour)
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I broadly agree with the Deputy that the selling off of State assets can be short-sighted and we do not have a great record in that regard. Deputy Ó Cuív and I had an exchange of views on the fall-out from the manner in which Telecom Éireann was privatised and the way it set back the economic potential of the country by depriving it of the investment that would have been necessary for the rolling out of broadband which, like electricity in the middle of the last century, is critical in this century for economic development and social progress.

I am not sure the sale of the Irish Sugar Company was very advisable either. I was in the House when the first stake was sold, in 1990 or 1991, if memory serves. The Minister in charge of the privatising argued vehemently that it was not privatisation because the Government was keeping a golden share which it would always be able to exercise. In the event, we lost the sugar industry, unnecessarily in my view. I recall a presentation made to me in Mallow after the Carlow closure which was purely a property play. Mallow was making arrangements to transfer the Carlow machinery to its plant and the capacity existed to transfer the beet from the Carlow-Kilkenny region. However, the industry was sold - in the interest of the developing world, as we were told, but more in the interest of ranchers in Brazil and elsewhere.

For that reason, I agree broadly with Deputy Ferris. The problem is that the country is broke as a result of the decisions taken by Deputy Ó Cuív and his colleagues in Government. The deal they made with the IMF, the EU and the ECB provides for some disposal of State assets. The programme for Government provides for up to €2 billion in total of a sale of State assets to invest in employment stimulation elsewhere in the economy. The short answer to Deputy Ferris's question is that if I had a choice and we were not in the mess we are in I would not be in favour of disposal of further State assets. My broad view is I am satisfied to assess them one by one, and this may well throw up a situation where it would not damage the economic future of the country to dispose of some of them.

Michael Kitt (Galway East, Fianna Fail)
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I shall take a few brief interventions from Deputies Mary Lou McDonald, Jerry Buttimer and Catherine Murphy.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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There are always choices for the Minister because politics is all about choices. I ask about another report relating to the ESB, namely, the Cahill report which was carried out by Frontier Consultants. It relates to the Minister's plan to hand over the transmission assets of the ESB to EirGrid. The McCarthy report, of course, goes much further than that in respect of the energy assets of the State. Why has the Minister not published the Cahill report?

Jerry Buttimer (Cork South Central, Fine Gael)
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I welcome the Minister's comments stating we will not have a fire sale of assets. It is important we learn from the Eircom debacle and that the legacy of the past 14 years is not just about-----

Michael Kitt (Galway East, Fianna Fail)
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Will the Deputy ask a question?

Jerry Buttimer (Cork South Central, Fine Gael)
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Is the McCarthy report seen now as the only panacea for all our ills? In his reply the Minister stated he hoped to finalise the review group. When does he hope to come back with that? Has the Government looked at means, reports or lines of inquiry other than McCarthy?

Catherine Murphy (Kildare North, Independent)
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This is a key area of concern. We are reading between the lines as to what the Government intends.

Michael Kitt (Galway East, Fianna Fail)
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A question, please.

Catherine Murphy (Kildare North, Independent)
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Every week at the Whips' meeting I look for the McCarthy report to be on the agenda for debate. It is high time we had a comprehensive debate on it but this has not been acceded to yet. Unless we get a comprehensive statement from the Government and have a debate, there will be guesswork and reading between the lines, with people feeling concerned unnecessarily about some of the State assets. Will the Minister ensure this debate is facilitated by the Government?

Michael Kitt (Galway East, Fianna Fail)
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I ask the Minister to be brief, too, as we are in overtime on this question.

Pat Rabbitte (Dublin South West, Labour)
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To answer Deputy Murphy first, I am happy to facilitate such a debate on the McCarthy report and have no difficulty with it. I will signal as much to the Government Whip, if that is helpful. I am happy to debate the issue.

Deputy McDonald is right - we still have some choices although not as many as those about which the Deputy waxes eloquent from time to time. In the tough global world in which we live we want to keep it that way and do not wish to end up like Greece which has very few choices, being faced as it is at present with a demand to sell off billions in euro of its state assets.

As to my plan to hand over the transmission assets, I do not know where Deputy McDonald gets this information. I am not aware of any such plan on my part. I will gladly publish the Cahill report as soon as the Government has disposed of the issue. There is no difficulty there.

I assure Deputy Buttimer there will not be any fire sale of State assets. The author of the McCarthy report makes plain in his report he does not advocate that any of these assets ought to be put on eBay next week. Nobody is recommending that course of action and I certainly do not. Deputy Buttimer is right that such a sale is not the only panacea in the circumstances in which we find ourselves. I explained that departments outside my area, such as Coillte, for example, are currently feeding back responses to the McCarthy report. However, if the wish of the Opposition is to debate the report in the interim, I am happy to facilitate that.

Michael Kitt (Galway East, Fianna Fail)
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We move to Question No. 34.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I have an answer-----

Michael Kitt (Galway East, Fianna Fail)
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The Deputy can raise the issue another time. We are on Question No. 34.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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My information comes from the programme for Government.

Michael Kitt (Galway East, Fianna Fail)
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The question is in my name but is nominated by Deputy Éamon Ó Cuív.

Pat Rabbitte (Dublin South West, Labour)
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There is a conflict of interests there, a Leas-Cheann Comhairle.