Dáil debates

Tuesday, 24 April 2012

Priority Questions

Sale of State Assets

2:00 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Question 107: To ask the Minister for Public Expenditure and Reform if he will ensure that the sale of State assets will not include the disposal of any assets of a company involved in the provision of water supply to households throughout the country; and if he will make a statement on the matter. [20542/12]

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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As the House will be aware, the Government decided last week that the new Irish water utility is to be an independent State-owned subsidiary of Bord Gáis Éireann. The new water utility is not and will not be included in the Government's programme of State asset disposals. The Government is committed to keeping it under State control.

Bord Gáis Éireann is an excellent example of a strong, vibrant and dynamic State company, which has demonstrated its capacity to invest and develop new, efficient and competitive business for the benefit of Irish consumers. In taking last week's decision, the Government's intention was that a number of key synergies would be achieved between the gas and the water utilities core network functions, such as operating in a regulated environment, network management, metering and utility operation systems. It is also important to note that these core functions will not be impacted by the sale of Bord Gáis Energy, the energy generation and supply business of Bord Gáis Éireann, which I previously announced as part of the Government's State asset disposal programme.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Perhaps the Minister did not get the gist of the purpose of my question. Earlier this year, on 22 February, the Minister announced the Government had decided to sell Bord Gáis Éireann's energy business. Be that as it may, we will not discuss whether it is a good idea in this debate. Subsequently, last week the Government decided in light of the experience and knowledge of Bord Gáis about metering, billing and dealing with hundreds and thousands of consumers throughout the country it should be given the job of dealing with the provision of water meters. In his opening comment the Minister-----

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I ask the Deputy to frame a question please.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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In his opening comment the Minister spoke about an independent subsidiary. These two words are mutually contradictory; a subsidiary is under something else and not independent by definition. Will the Minister accept that regardless of whether the Minister, Deputy Hogan, made a hames of his role in the proposed metering of water, he will be held responsible for the possible privatisation of water meters throughout Ireland because he, as Minister, has opted to give that business to a company, part of which Government has already decided to privatise? The Government has decided to sell-off part of Bord Gáis Éireann, BGE, and, because of its expertise in metering and billing households, to give it responsibility for the new water utility. Will the Minister accept that the public will find it hard not to view this as a key step along the road to privatisation, which I accept is not the Minister's intention at this stage? However, in light of this, I ask that the Government remove to Bord Gáis from its list of companies to be privatised.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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No. Let me be crystal clear, the new State company, Irish Water, will, as far as the Government and I are concerned, be a wholly State owned company per omnia saecula saeculorum. This will be enshrined in specific legislation to be introduced. Irish Water will be a State company providing water in an integrated manner across the State. It is wholly different from the sale of the energy generating component of BGE. We want to keep the expertise that set up and developed BGE and to use it in setting up the next fine State company. Things are not set in aspic. The next major State company, the biggest since the ESB was founded, will be Irish Water. Bord Gáis Eireann, in terms of its level of expertise in managing a publicly owned company with a distribution, billing and metering system, has the management structure which the Government wants to roll out over time - it will be years before all of this is put in place properly - the new Irish Water company. That is the logic behind it.

The parallel issue of setting up competition within the energy sector, which the energy generating component of BGE will provide as competition for the wholly State owned ESB, will also be good for the consumer.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Will the Minister accept that the more he speaks the more he confuses the issue in the public mind? The Minister stated in his initial reply that Irish Water would be an independent subsidiary of Bord Gáis. In his subsequent reply he said it would be a wholly owned State company. It cannot be both. It must be one or the other. It will be owned by Bord Gáis, not the State.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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The State owns Bord Gáis.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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It does not own the shares in its subsidiary companies.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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It does.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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It does not, Bord Gáis owns them. The Minister should check company law. One does not own the assets of a company just because one owns a share in it. That is a fact. I again plead with the Minister to remove Bord Gáis from its list of companies to be part privatised by way of the sale of assets given it is the company to which the Government is giving the water metering and billing service in regard to the provision of water. The two services should not be combined in one company.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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I thought earlier that the Deputy was just being inquisitive. I know now he is being mischievous. I will clarify the position again. Irish Water will be set up as a subsidiary of a wholly owned State company, namely, BGE. It will be wholly State owned. It is intended-----

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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BGE will be the parent company.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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The State owns BGE and every aspect of it.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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No. It owns a share of it.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Please allow the Minister to continue without interruption.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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The Deputy is engaging in tautology. It is the Government's intention that the new Irish Water entity - this will be put in statute law and debated in the House - will be wholly State owned. Parallel to that, as part of the memorandum of understanding, we have looked at what non-strategic assets we could sell off. The Government has come to the conclusion that allowing for greater competition in the energy sector through the privatisation of the energy generating element of BGE, and for private competition to the wholly owned public entity, the ESB, which will remain as a vertically integrated wholly State company, will be good for the Irish consumer.