Thursday, 9 October 2014
Sale of State Assets
11. To ask the Minister for Public Expenditure and Reform the manner in which cash received from the sale of State assets has been deployed to date; and if he will make a statement on the matter. [38160/14]
The Exchequer has to date received special dividends of €150 million from Ervia and €197 million from ESB arising from sales of State assets. The Ervia special dividend represents the first instalment of approximately €1 billion expected to be received from Ervia arising from the successful completion in June of the sale of Bord Gáis Energy. The balance will be paid, over time and as required by the Government, following the completion of an internal reorganisation of Ervia and establishment of a networks subsidiary, Gas Networks Ireland, in accordance with the Gas Regulation Act passed by the Oireachtas this year. We will require the transfer of Ervia's debt facilities and renegotiation of its debt covenants under that Act.
The ESB payments arose from ESB's disposals of its 50% shareholdings in two overseas assets in the UK and Spain. A further €200 million remains to be paid by ESB, representing a realisation for the Government of the value of ESB's two midlands peat plants, as announced by ESB in July. I can give the Deputy some more detail on that if he wants it.
It has been the Government's consistent position that funds released from asset disposals should be used, to the greatest extent possible, to support job creation. Realisation of these proceeds has allowed for additional capital investment of approximately €0.5 billion to date. This includes €160 million for a project preparation facility for the new public private partnership, PPP, programme, including enabling works at Grangegorman for the new DIT campus and for the preparation of the PPP roads projects, including the Tuam project which started earlier this year.
It also includes an additional €150 million investment in county roads, schools and energy efficiency works in local authority housing which I announced in June 2013. Finally, it includes additional investment of some €200 million, announced in May of this year, for a range of projects including a further allocation to county roads, social housing, tourism related projects - the Deputy will recall money for the green ways and Lough Derg - and a number of projects commemorating the foundation of our State. I will provide all the details.
I thank the Minister. Perhaps he would arrange for the details to which he referred to be forwarded to me as quickly as possible. There was originally a target of €2 billion or €3 billion. Today the Minister tells me he has received €150 million from Ervia and €197 million from the ESB, a total of €347 million, approximately 10% of the target. What happened to the rest?
The Minister did not mention that. Where is that money? We keep asking whether it is ring-fenced for the children's hospital. I am sure it has gone into he national finances somewhere and the Government will bring it back out, or is it held in an escrow account for the purpose? We would like to know. Has any of it been used generally for debt reductions? We all agree the sale of assets should be used for reinvestment and job creation. The programmes the Minister mentioned – the PPP programme for Grangegorman, secondary roads throughout the country, schools, tourism projects and housing – are significant and welcome. However it does not tally with the amount of money the Government received. Could the Minister give us a good reason why Ervia, which has approximately €1 billion from the sale of Bord Gáis Éireann’s business, is still holding onto it? Is the Minister waiting to balance the books on budget day and say he will have €500 million from this for next year and €500 million for the election the following year?
Regarding the national lottery, we spent €200 million as I indicated to the House and we have kept €200 million for the national children’s hospital. That money is there and available. Regarding bringing the money from Ervia onto the balance sheet, as I explained, there are restrictions on bringing it all on in one go. It must be done by special dividend and there is a process and a legal limit on what can be done, which we will do on the basis of need to meet the specific purposes we have set out. To date, €500 million has been allocated and is in the process of being spent. I can give the Deputy a note on issues such as the PPP preparations, the additional money on county roads, the energy refit of local authority housing and additional schools such as the 28 in the first round.
It will be good to get the note. Will the Minister also give me a detailed note on the rules on the special dividend? I can understand that there probably are regulations on how much can be transferred from a semi-State company onto the State balance sheet. We will study the note. There is a capital investment programme of approximately €3.3 billion per annum. When the Minister gives me the details of all the projects he mentioned, could he separate what was spent from the normal annual capital investment programme from the extra money coming from these sources? Some of those matters would have been presumed to have come from capital investment programmes or other normal annual budgets. The funds generated from the sale of the assets to date seem to be the €150 from Ervia, the €197 from the ESB and the €200 million from the national lottery and perhaps the €200 million extra that is on its way from the lottery.
It is discrete and separate from the money allocated under the public capital programme, which is approximately €3.3 billion, as the Deputy said, and which is apportioned across all agencies of the State. I would not have been able to do those additional projects and tee up the PPPs, allocate money for the voids and energy refits in local authority housing if I had not got the additional money. I have set it out several times, and I will do it again to make it clear to the Deputy.