Wednesday, 7 March 2012
Sale of State Assets
Question 4: To ask the Minister for Communications; Energy and Natural Resources if he completed an impact analysis of potential job losses on ESB or Bord Gais when they are part privatised; if he will publish same; and if he will make a statement on the matter. [12871/12]
The Government has decided that Bord Gáis Éireann's energy business and some of the ESB's non-strategic power generation capacity will be part of the assets disposal programme required by the memorandum of understanding. The Government has also reiterated its commitment to retaining the ESB as a vertically integrated utility in State ownership and to retaining the electricity and gas networks, as well as the two gas interconnectors and the east-west electricity interconnector, in State ownership. I do not envisage job losses in ESB or BGE as an inevitable outcome of the planned disposals. The proposed sales can deliver positive outcomes for Ireland's energy markets, for the two State utilities and their employees, for consumers and for business. The ESB will remain a strong strategic player, positioned more competitively in the all-island energy market and in due course in the integrated European market. BGE is a dynamic and successful company which has delivered real benefits for consumers as it has invested in and increased its power generation and energy supply. The sale of BGE's energy business will support this vibrant company and its employees in continuing to grow while enhancing competition in the energy market for the benefit of the economy and consumers.
The asset disposal programme will be implemented in an orderly process over time in a way that allows all policy regulatory and financial issues to be addressed in advance and that ensures full value for the State. It is important to emphasise that the Government has agreed with the troika that a proportion of the proceeds of the State assets programme can be used for reinvestment in support of employment and economic recovery.
Will the Minister let us know directly whether there has been an impact analysis? Most commentators have the opinion that full or part-privatisation effectively means potential job losses, because private investors seek a return on their investment. That must be planned for and factored into the strategy that the Government undertakes as part of this programme. We also need to debate further in this Chamber the fuller definition of strategic, as opposed to non-strategic, State assets. I will give the Minister an example which is not under his area of responsibility. Deputy Ferris and I are of the view that the Shannon-Heathrow landing slots under the stewardship of Aer Lingus are a strategic State asset for regional development in our part of the country, yet the Government seems to have taken a view that they are a non-strategic State asset.
In pursuing an agenda, it is not a matter of left-wing or right-wing policy; what is important is whether it is the right thing to do, socially and financially, for the country, bearing in mind the employees involved. Has the Minister carried out an impact analysis? If he has, can he publish it?
There are deficits in the pension funds of the aforementioned companies. How does the Minister propose to deal with this prior to embarking on this course of action? The deficits are significant.
If the Minister tries to sell these assets in a climate in which these deficits persist, he will secure a potentially depressed sale price or face an industrial relations issue as part of the sales process. I ask him to respond to these two specific items - the analysis of the impact on jobs and the pensions deficit.
I have not made any analysis of the impact on jobs and in advance of decisions being made I am not sure how one would do so. I have talked to management in the ESB and Bord Gáis and I am happy as a result of those discussions that part-privatisation of, say, Bord Gáis down the line, far from being likely to lead to job reductions, could lead to additional employment as additional investment by a private sector partner helped to grow the market.
The second matter raised by the Deputy - the pensions issue - is separate to be considered down the line in the two companies to which he referred. I am glad that the ESB has managed to get the support of its group of unions to refurbish the pensions scheme and done so imaginatively and creatively. Bord Gáis is well on the way to doing the same. These are immensely successful companies and there is no intention, as I have said time and again, of disposing of any part of them in inferior market conditions or in the current market environment.