Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

In the context of planning for the use of the proceeds arising from the State assets disposal programme, which included the sale of Bord Gáis Energy, my Department consulted with the Central Statistics Office, via the Department of Finance, in regard to the statistical treatment of the proceeds and their impact on the general Government balance. My Department did not have direct discussions or correspondence with EUROSTAT on the issue as it was a matter for the Department of Finance.

The position in this regard is that, under EUROSTAT rules, the amount of any dividends received from a State company, including proceeds from asset disposals, which can improve the general Government balance is limited by reference to the entrepreneurial income of the relevant company in the previous year. In order to comply with the fiscal rules of the Stability and Growth Pact, the scope for the Government to use such dividends for additional expenditure on a general Government balance-neutral basis is limited to the amount by which the dividends paid actually improves the general Government balance. This has meant that in order to take maximum advantage of the asset disposal proceeds, they cannot all be availed of at once but must be remitted to the Exchequer over a number of years.

It is for this reason that Ervia has, to date, remitted €350 million to the State by way of special dividend since the sale of Bord Gáis Energy was completed, that is, €150 million in 2014, €100 million in 2015 and €100 million in 2016. A further special dividend of €100 million is expected in this year. It is proposed that the remainder of the proceeds will be paid to the Government on a phased basis, as required by Government, and in a manner that is consistent with protecting Ervia's investment grade credit rating while also maximising the general Government balance impact of the payments.

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