Dáil debates

Thursday, 24 October 2013

Topical Issue Debate

Semi-State Bodies Issues

3:40 pm

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Fianna Fáil has serious concerns about the proposed sale of two ESB plants in Lough Ree and west Offaly. I, Deputy Corcoran Kennedy and others in the region received an e-mail yesterday from the ESB asking that we meet with their representatives. The e-mail stated that we were to be briefed on an imminent announcement affecting our constituency. I was intrigued and expected that this would be a positive development; however, this was not the case. I was informed that as part of the Government's directive to State and semi-State bodies, the ESB was not only selling international assets in Spain and the United Kingdom, but was also proposing to sell ESB power plants in west Offaly and Lough Ree, namely, Shannonbridge in Offaly and Lanesboro in Longford. My initial reaction was one of shock because this House has never acquiesced to demands to debate the McCarthy report and its contents or recommendations. It was only by asking questions of the Government that the House received assurances on what was off the table or out of the portfolio of assets to be sold.

My immediate concern was obviously Bord na Móna, the ESB and Coillte. My county of Offaly, my constituency and the midlands region are synonymous with power generation and energy production. The sector has been challenged over the years as peat stocks were depleted and new forms of energy and tapering of fossils continued at pace. However, such change, diversification and commercial realities were met head on by the workforce, management, the then Government and political representatives of all hues. Such innovation, initiative and leadership under Fianna Fáil led to the creation of Lough Ree Power, West Offaly Power and Edenderry Power, each with the support of Bord na Móna contracts and a PSO in conjunction with EU guidelines and directives, ensuring the future of power generation in the midlands for at least 25 years from inception. That inception, in the case of Lanesboro and Shannonbridge, began in 2005 and 2006, respectively. That 25 year guarantee began in 2005 and 2006. It is now 2013, just seven and eight years later.

The Minister for Expenditure and Public Reform, Deputy Howlin, told the Dáil in May 2013 that "with regard to the ESB, there will be no sale of any power generating capacity in the Republic of Ireland, or the island of Ireland''. That commitment does not fall into the category of "Isn't that what you do in elections? or commitments made on the back of lorries in Roscommon, or outside this House to people aged over 70. That commitment was given here, and I would have thought there would have been more respect for the House. I can understand the disrespect for commitments made on lorries in Roscommon and outside the gates of Leinster House.

Be that as it may, and despite the fact that the credibility of the Minister and his Government is left severely dented by this, I now wish to ask the Minister some severe and honest questions. Can he assure the workers in respect of their contracts of employment? What happens now to their ESB pensions? If the ownership of these power plants is to be transferred, how can their pensions be transferred? Will they be defined benefit pensions or defined contribution pensions? Please let our community know what the future of the most important industry in our area will be. What will be done to ensure that employment in our area is maintained? What will be done to secure the future of energy production in Offaly and beyond? Has the Government considered a scenario where Bord na Móna would take over these plants? Would that not be a shot in the arm that the company needs? Would that not add to the sort of diversification in the energy sector that is necessary, which the Minister mentioned today when he opened a wind farm in Laois? It will allow for a competitive market which will give the consumer cheaper access to electricity. That is the commitment our region requires. That is the commitment that will allow Bord na Móna develop further and allow our region continue to be the leader in power generation in this country.

3:50 pm

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

I am grateful to Deputy Cowen for allowing me to answer this question. The credibility of the Government is very high in his constituency. I have just returned from there having announced measures to bring additional employment to various parts of the midlands, including in the Deputy's constituency. When he talks about the commitments given to Lanesborough and Shannonbridge in 2005 and that it is now 2013, he forgets that 2008 intervened. The year 2008 will go down as a milestone in the country's economic history and to quote Yeats, "All changed, changed utterly".

Arising from the commitment in the bailout agreement between the then Government and the troika in 2010 and following months of negotiation between the troika and the new Government, in February 2012 the Government announced its intention to consider a range of disposal options across the State sector to achieve a goal of realising proceeds of up to €3 billion. The Government indicated in July 2012 that a sale of the energy business of Bord Gáis Éireann and some of the ESB's non-strategic generation capacity would be part of the asset disposal programme.

The Government subsequently formally requested the ESB in October 2012 to develop a programme for the sale of its non-strategic generation capacity, with the objective of delivering special dividends to the Government, targeted at up to €400 million by the end of 2014.

Leaving the ESB power stations issue aside for the moment, it is important that the parameters for this issue be set out. If the original intention to raise €5 billion from the disposal of State assets had stood, it would inevitably have given rise to pressure to privatise the ESB. I am glad for a variety of reasons in the national interest that the ESB will be retained in State ownership as a vertically-integrated utility.

The ESB as a State-owned energy company has made a major contribution to Irish economic and social development. Notwithstanding growing competition in the generation and supply business, which I welcome, the ESB has been a commercial success over the years and particularly in recent years. I am referring to the assets in Britain and Spain. The sale of these assets was not expected to achieve the full amount of the required special dividend of up to €400 million and will not do so. Accordingly the ESB has now announced its intention to sell its two peat stations, West Offaly Power and Lough Ree Power. In selling these two stations, the ESB will be proposing to prospective buyers an arrangement under which it continues to operate and maintain the peat stations with existing staff. If there is any change to this, the ESB will consult with staff and unions prior to sale.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister immediately seeks to revert back to 2008, which is the stock answer to any question from this side of the House irrespective of the content of such a question. He spoke about credibility and he wants to refer to previous commitments and statements by members of various political parties. I mentioned what the Minister, Deputy Howlin, said here as recently as May. The Minister, Deputy Rabbitte, made no reference to that comment by the Minister, Deputy Howlin and his commitment that the sale of any ESB asset would not include any generation station in the Republic or on the island of Ireland. If anybody has a credibility problem, it is the Minister in that regard.

On the memorandums of understanding, I quote from a letter from the Minister, Deputy Noonan, after the first visit by the troika. He referred to the Government plan and stated, "It is important that we make effective use of our State assets and, where appropriate, dispose of them to help reduce our Government debt". That was the first occasion on which the sale of State assets was mentioned in the context of paying down debt. Therefore it is the actions of this Government which moved the State's commitment to consider possible privatisation to an ambitious programme which would help reduce Government debt. That is that issue out of the way.

If the Minister wants to have an argument and rerun the last general election campaign to raise the Labour Party's poll rating out of the ashes of 6%, that is his business. However, I am interested in looking after my constituents who asked me to raise this issue today. What commitment can the Minister give my constituents in the workforce on their pension entitlements in the first instance? Has the Government given any consideration to the role Bord na Móna can play after 2019 and 2020? It appears that what is being offered for sale has the benefit of Bord na Móna contracts and PSO commitments up to 2020 and nothing thereafter. If the Minister can answer that question properly and effectively, maybe his credibility can be restored.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

It is a while since I have seen anyone in the House with the bullish attitude of Deputy Cowen without having any-----

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
Link to this: Individually | In context | Oireachtas source

Facts.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

-----facts to back him up. I can start with his last question on Bord na Móna. Bord na Móna is a commercial State company and if it wants to bid for these assets it is free to do so. However, given that the whole purpose of what we have been forced into is disposal of State assets, it would be very odd to have another State company buy the assets.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Government was not forced into it. The Minister would like to have the public to believe it was forced into it for the benefit rubbishing the commitments made in the Labour Party manifesto.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister has only-----

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

As recently as in the debate on the Gas Regulation Bill, I took the opportunity to put on the record of the House the origins of this issue, which are in the 2010 bailout agreement when the then Fianna Fáil-led Government agreed to the sale of State assets.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It did not agree.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

At the first meeting the incoming Government had with the troika when it advised us of the €5 billion commitment, we started negotiations. They continued for six months and instead of €5 billion, we agreed a figure of €3 billion.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is a distortion of the facts.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

Instead of the €5 billion being used to write down debt, we got a commitment that 50% of whatever proceeds were realised would go towards the creation of employment and reinvestment for productive purposes. That, unfortunately, is the history and Deputy Cowen is now trying to rewrite history.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What about the comments of the Minister, Deputy Howlin?

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

I will deal with the Minister, Deputy Howlin, also. What is being discussed this evening is nothing new. I have mentioned it in this House and outside it time out of number - not in naming the two stations, but naming the Government decision to dispose of the energy business of Bord Gáis Éireann and some power generation plants in the ESB. That is as old as the lifetime of the Government. The Minister, Deputy Howlin, correctly told the House that no such power generation facility would be disposed of this year, nor will that happen.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I quoted the Minister, Deputy Rabbitte.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

As I said in my original answer, we are required to produce up to €400 million in special dividends from the ESB before the end of 2014.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Minister.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

The Deputy has quoted a letter of the Minister, Deputy Noonan, completely out of context. On whose behalf does Deputy Cowen think the Minister, Deputy Noonan, could write other than on behalf of the Government, of which he is a member? The reason he was writing was the agreement entered into in 2010.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister is distorting for his own benefit.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We must conclude.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

It is very fortunate-----

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Labour Party Members were aware of the state of the country's finances when they put a manifesto before the electorate.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister to conclude, please.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

They were ashen-faced walking out of the Department of Finance.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

It is very fortunate that I happen by accident to hold the job I do. If I did not, Fianna Fáil would have privatised the ESB.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
Link to this: Individually | In context | Oireachtas source

Stop it.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context | Oireachtas source

I am very proud to say that will not happen under my stewardship.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister will not make any decision.