Pat Rabbitte (Dublin South West, Labour)

The point I want to make is that the profligate years are over.

Senators Daly and Barrett raised a point about the cost base in the energy companies, and Senator Daly raised explicitly the issue of pensions. I must say that the cost base is an issue. There are negotiations currently under way between the management of the ESB and the group of unions, the purpose of which is to get 20% off the cost base by the middle of November - I think the deadline is 20 November. Those discussions are proceeding apace.

I do not think Senator Barrett entirely accepts that things have changed in latter years. There is serious competition in the electricity market. There is a huge market in the neighbouring island which is catered for by six companies; there are four companies here, and there is competition.

This brings me to the question raised by Senator Darragh O'Brien about the disposal of a minority stake in the ESB. The genesis of all this, of course, is the memorandum of understanding with the IMF and EU. I do not know how so young a colleague as Senator O'Brien could have forgotten that. It is very recent. Yes, we did try to moderate it. In the programme for Government we have committed to the disposal of up to €2 billion of non-strategic State assets. The troika takes a different view. The Senator is right in saying that we modified the commitment, in the most recent negotiations at the time of the interest rate changes and the job initiative, to an ambitious programme of disposal of State assets. If Senator O'Brien was still here, I would not be able to answer the question of what "ambitious" means. I will tell Senators one thing, though: it means more than €2 billion. That is the situation we are in.

Looking at the menu of State assets, one can see that to realise real value one must target the energy companies. We can talk about selling the remaining stake in Aer Lingus or the forests on Coillte land, but the amount of money involved, on the scale of the indebtedness, is not significant. Therefore, it is the view of the Government that the sale of a minority stake in an integrated vertical utility such as the ESB is the best approach. It would allow us to maintain control, which is critical in respect of issues such as security of supply, control of the transmission network and so on, as referred to by Senator Ó Clochartaigh. I am very hopeful we will secure a compatible investor. It is a profitable company which is returning an enormous dividend to the Exchequer every year. As such, it is an attractive prospect for a certain type of investor. The detail of that is being worked out by the group to which I referred, chaired by my Department. It is due to report by the end of November.

There is no question of anybody trying to sell State assets. The author of the McCarthy report made the point that he was not proposing they be put on eBay next week. While market conditions remain as they are, the question does not arise. One cannot foresee the troika forcing us into any type of fire sale. Members will have noted the public remarks today by the European Commissioner for Regional Policy that, unlike other countries, Ireland has complied with the strictures imposed on it, painful as that has been. I do not wish to use the clichés employed by my predecessors along the lines of turning corners and so on, but we have been performing well. If the countries into which we are trading were not themselves in some difficulty, the prospects for a return to economic growth would be significant in the short term.

The most important question is the one raised by Senator Mulcahy as to whether we can secure a divvy-up of the proceeds. The notion of disposing of State assets and putting the cheque in an envelope to Monsieur Trichet in Frankfurt is not accurate. We are seeking to secure a share of the proceeds, which would allow us, through the NewERA vehicle, some flexibility in terms of investment, whether in broadband, energy or water. Senator Crown raised the issue of water supply, which is a matter of vital importance. People in this country think that because water falls so frequently from the sky we have no problem. That is not the case. We have a major problem which must be addressed by modernising our water facilities. The proposed bord uisce, or whatever it will be called, must be established. In order to take action in these areas we need access to a parallel stream of investment.

Senator Ó Clochartaigh raised the question of a better return for the State on oil and gas discoveries and asked whether I read the relevant SIPTU document. I have read that report and it is an interesting contribution to the debate. However, it is important that we avoid comparing apples and oranges. It is entirely incorrect to claim we are at the bottom of the league in terms of return. A person known to all Members has written several comparisons between Ireland and Norway in this regard. The reality is that there are no comparisons between us and Norway when it comes to oil and gas. It is its uniquely advantageous geological structure, which gives one a prospect of finding oil in one strike in four, that confers on Norway its position. In this country, by contrast, the strike rate has been one in 40. We have had only 156 drillings in 40 years.