Seán Fleming (Laois-Offaly, Fianna Fail)
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9. To ask the Minister for Public Expenditure and Reform his views on whether the State is achieving value for the taxpayer from its privatisation programme; the use to which the funds raised will be put in 2014; and if he will make a statement on the matter. [2674/14]

Seán Fleming (Laois-Offaly, Fianna Fail)
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The purpose of the question is to elicit the Minister's views on whether the State is achieving value for money for taxpayers from the current privatisation programme. I refer to the sale of Bord Gáis Energy, a number of ESB power plants for which payment to the State will be made by way of dividend, and the national lottery licence. I also ask him to outline the use to which the funds raised will be put, including whether they will be used for debt reduction purposes. The Government spoke of using the proceeds from the privatisation of State assets for job creation. I understand the Government is considering using some of the proceeds for a redundancy programme - in other words, to pay for job losses. I ask the Minister to comment.

Brendan Howlin (Wexford, Labour)
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As I informed the House on a number of occasions, in disposing of State assets it is a primary concern of the Government that value is secured for the Exchequer and fire sales are avoided. As we demonstrated at an earlier stage of the Bord Gáis Energy transaction, Ministers are fully prepared to stop a transaction process if we consider that bids received are not delivering acceptable value.

 That said, I am happy that value is being achieved in the transactions that have been completed or brought close to completion. Subsequent to our decision that value was not apparent in the Bord Gáis Energy transaction, revised bids were received which offered materially increased value for the company.  A consortium comprising Centrica plc, Brookfield Renewable Power Inc and iCON Infrastructure has been selected as preferred bidder for Bord Gáis Energy on the basis of its revised bid, which has an enterprise value of up to €1.12 billion. Furthermore, ESB's sale of its 50% shareholding in Marchwood Power in the United Kingdom in November achieved a price in excess of expectations, which should realise €140 million in dividends for the Exchequer this year.

As to the use to which these funds will be put, the Deputy will be aware of the Government's consistent position that the funds released from asset disposals should be used, in one form or another, to support job-creating initiatives in the economy. At budget time, I factored a total of €110 million into the Estimates for 2014 in respect of projects supported from the sale of State assets. Of this sum, €45 million will fund part of the advance works associated with public private partnership projects. Specifically, €25 million will be spent on the Grangegorman project and €20 million on road public private partnerships.  The remaining €65 million will be spent on the continued roll-out of the additional Exchequer investment projects announced in 2013 in energy and schools.  Additional elements of this stimulus plan will be rolled out as the various asset sale transactions are completed and the proceeds are realised.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Will the Minister provide a timetable for the receipt of €1.2 billion from the privatisation of Bord Gáis Energy, the parent company of Irish Water? The Government has demanded a dividend of €400 million from the ESB, of which €140 million has been achieved through the sale of a plant in the United Kingdom. I understand the company has decided to sell two power plants in the midlands to achieve the balance of the dividend. What are the expected proceeds from the sale of the national lottery this year? Until last year, the Government insisted that half the proceeds from the sale of State assets would be used for debt reduction. Now that the troika is no longer in town, will the Minister confirm that is no longer the case? Perhaps he does not wish to say that loudly as he did not refer to it this morning. I would welcome his views either way.

I am concerned that the Minister is saying there are people on the public payroll with no job to do who should perhaps move on. He also stated he would consider using the proceeds of sales of State assets to pay for a redundancy programme. Using this income to eliminate rather than create jobs is new to me.

Brendan Howlin (Wexford, Labour)
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I did not say that in any reply this morning. I will try to deal with the series of questions the Deputy asked. As to when we will receive the money from the sales of assets, the sales must first be signed off and concluded. Bids have been accepted but there is a process involved. For example, as we saw in the case of the national lottery licence, a secure transition of staff is required. This often requires the intervention of the Labour Court, ballots by staff members and so on, and takes a little while. For this reason, in the case of the national lottery, the issue has not yet been fully nailed down. While I cannot say definitively when the various transactions will be completed, the transactions involving the national lottery, Bord Gáis Energy and Marchwood Power should all be concluded this year.

We must adhere to a process. As I have explained previously, we cannot bring all the money in the energy sector onto the public balance sheet in one year. We must comply with EUROSTAT requirements on such matters. As a result, the revenues will have an impact on more than one year's Exchequer returns.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Minister is essentially saying he wants to stage-manage the timing of receipts from the sale of State assets to assist the budgetary process next year. There is an unexplained figure here. Despite the requirement for an adjustment of €3 billion last year, the Government announced an adjustment of €2.4 billion on budget day. Some of the balance of €600 million was made up using the proceeds from the sale of State assets. The Minister indicated previously that these proceeds would be used for a particular purpose. He now says some will be held off until next year to help the budget next Christmas. Perhaps the adjustment in next October's budget will be very light given that the Government proposes to deliberately hold back proceeds from the sale of State assets to help meet deficit targets next year.

I ask the Minister to address redundancies in the public service, an issue to which he did not refer. The Minister for the Environment, Communications and Local Government has spoken in the House about leaks, boil-water notices and vulnerable water supplies. Why not use the proceeds from the sale of the parent company of Irish Water, Bord Gáis Éireann, to fix water problems, rather than wait for water charges to be introduced to every household to fund such works?

Brendan Howlin (Wexford, Labour)
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The Deputy has asked a number of questions and put a twist on what I said. Legally, I cannot transfer all the money from sales of State assets to the balance sheet this year. It is not a matter of choice but a requirement under EUROSTAT rules. On deficit reductions, some countries - I will not refer to individual states by name - proposed an enormous sale of state assets as a bookkeeping exercise to balance their books. The problem with this approach is that while balancing the books in one year through income from such sales is well and good, what does one do the following year? EUROSTAT requires states to use a mathematical formula based on the dividend paid by the State company in question as the maximum a country can account for on its books on an annualised basis. We must comply with European regulations in these matters.

The proceeds from the sale of State assets will give us the capacity to introduce a further stimulus plan. Some of the very good projects cited by the Deputy could be considered when we receive additional Exchequer moneys to spend on capital works.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I must move on as six minutes have expired. As Deputy McLellan, who tabled Question No. 10, is not present, we will move to Question No. 11.