Martin Mansergh (Tipperary South, Fianna Fail)

The Deputy has raised an issue arising from the memorandum of understanding on the financial assistance programme for Ireland recently agreed between the Government and the IMF and the EU Commission in liaison with the ECB. The memorandum provides inter alia that, building on the report of the McCarthy group on State assets, an independent assessment of Ireland's electricity and gas sectors will be carried out before the end of 2011 with a view to enhancing their efficiency. The Government will then consult with the Commission on the results of this assessment with a view to setting appropriate targets for the possible privatisation of State-owned assets.

The House has had a number of opportunities to discuss the provisions of the financial assistance programme during the month of December and was twice provided with the documents outlining the terms of the programme during that month. The first time was on 1 December when the memorandum was provided in the context of a lengthy discussion about the national recovery plan and the financial assistance programme. On 14 December a document, entitled "EU-IMF Programme of Financial Support for Ireland", was laid before the Houses of the Oireachtas. This document incorporated the memorandum on economic and fiscal policy, the memorandum of understanding on specific economic policy conditionality and the technical memorandum of understanding. It was provided in the context of a Dáil motion on 15 December which approved the terms of the programme.

The terms of the memorandum of understanding do not represent a commitment to privatise State assets. They are an agreement on the Government's behalf to examine the policy issues involved and to discuss them with the Commission. Given the current financial condition of the State, it would be negligent not to examine all reasonable ways in the public interest to reduce the State's indebtedness, including through the sale of certain assets. It is not sustainable for the State to continue borrowing at current levels and efforts to return the deficit to more manageable levels and put the public finances on a more sustainable footing must continue during the coming years. Given the scale of the adjustment required, all avenues for reducing expenditure and raising additional revenues must be explored.

It was in this context that the Minister for Finance established the review group on State assets and liabilities in July 2010 to advise him on how these assets can be better deployed or disposed of to support growth and contribute to national investment priorities. The group is chaired by Professor Colm McCarthy. The other members are Mr. Donal McNally, Second Secretary at the Department of Finance, and Professor Alan Matthews of Trinity College, Dublin. The Government gave the group the following terms of reference: to consider the potential for asset disposals in the public sector, including commercial State bodies, in view of the indebtedness of the State; to draw up a list of possible asset disposals; to assess how the use and disposition of such assets can best help restore growth and contribute to national investment priorities; and to review where appropriate relevant investment and financing plans, commercial practices and regulatory requirements affecting the use of such assets in the national interest.

The group's attention has been focused primarily on the commercial State bodies, but it has also examined the intangible assets under State control to determine whether they are efficiently allocated and priced at an economic rate. All commercial State bodies and Departments were invited to make formal submissions to the group and the group advertised generally for submissions from interested parties. More than 45 submissions were received. Since September, the review group has engaged with almost all commercial State bodies. It is finalising its report, which the Minister for Finance will receive in due course.

The Government acknowledges the important role that State agencies have played in the economic development of this country through the provision of key infrastructure such as energy and transport and the commercialisation of agriculture and resource-based industries. The overwhelming public need is to restore the fiscal balance and economic growth as quickly as possible. In the current economic and fiscal environment, it is therefore crucial to review the contribution that the State agencies might make in this regard.

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