Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak on the motion related to the establishment of a connectivity fund within the Ireland Strategic Investment Fund using the proceeds from the sale of a stake in Aer Lingus.

I must reiterate at the outset that Fianna Fáil opposed the opportunistic bid by IAG for Aer Lingus which was tabled just after the restructuring of the company's pension scheme. It is important to recall that the retired and former staff members in the IASS pension scheme were treated very badly. No sale would have been possible without the pushing through of the restructuring of the pension scheme. My colleague, Senator Darragh O'Brien, has worked with others in leading the fight on behalf of the current and deferred pensioners and he has consistently made the important point that the State Airports (Shannon Group) Act 2014 was the first time in the history of the State that a Government introduced legislation to change a specific private pension scheme. The legislation reduced pensions and payments to retired members by six weeks per annum and long-term deferred members' pensions by up to 60%. It also transferred existing members to an inferior pension scheme. The Fianna Fáil Party will continue to push for a fair and equitable solution to the IASS pension dispute.

In addition, there remains serious doubt about the Government claim to have extracted legally binding connectivity commitments. It remains to be seen if these stand up in practice, particularly if the IAG group runs in to future difficulties.

I agree with the Minister that this is not a rerunning of the debate on the sale of the stake in Aer Lingus. However, today's debate can change neither the reality of the sale of Aer Lingus nor the fact that the Aer Lingus sale price of €2.55 per share was 15% less than the €3 per share value suggested by independent analysts. This follows similar poor outcomes in terms of value for money in the sale of Bord Gáis Éireann, Irish Life and the partial disposal of Bank of Ireland.

The Government has consistently sought to avoid scrutiny of the impact of this privatisation programme on consumers, employees, the long-term interests of the State and how the proceeds are deployed. The Oireachtas needs to be able to evaluate the impact of the sale of State assets once the dust has settled. For example, the sale of the national lottery licence was notionally to fund the construction of the children's hospital but this has been subject to one delay after another. We cannot allow this to happen again on this occasion.

Now that the Aer Lingus sale has been completed, it is imperative that the funds raised are put to the best possible use. We probably should be grateful that EUROSTAT rules do not permit the Government to spend the proceeds in one fell swoop. Were that possible, they would surely be tempted to engage in pre-election spending.

Investment in our national infrastructure is vital to sustaining economic recovery, particularly at regional level. The capital budget has been cut too far and has been reduced to dangerously low levels. The proposed connectivity fund will go a small way towards addressing this. The fund is limited by the commercial mandate to which it must operate and, therefore, is not a replacement for direct Exchequer funding for much needed communications infrastructure projects. It will, therefore, be important to establish the evaluation process which the fund will use for projects. In so far as possible, clear investment guidelines are needed to ensure stakeholders clearly understand what can and cannot be done by the fund. It cannot be allowed to turn into a fund to re-elect any party or Government.

The fund should report as regularly as possible on the projects it is undertaking and the returns they are generating. The fund will make commercial decisions independently. We need never forget that the value of Aer Lingus was built up over generations. The proceeds must be used responsibly and accordingly. The regional airport network is particularly important to balanced regional economic development. The sheer dominance of Dublin Airport has put other airports, including Cork and Shannon, at a serious disadvantage. The fund should be deployed as strategically as possible to give these airports and Knock Airport a fighting chance of competing commercially. This will enhance the ability to attract and retain industry throughout the country.

The national broadband network also has significant problems particularly in rural areas and 4G mobile phone coverage needs to be considerably improved. This should and can also be addressed in a commercial manner by the connectivity fund. While it is not a life changing amount of money, it is a significant sum. It is important that it be spent wisely. It may be some years before we know for sure if this has happened. I wish the NTMA and the Ireland Strategic Investment Fund well in its endeavours and I am sure they will use the fund wisely to improve on our connectivity across a number of different aspects.

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