Sean Barrett (Independent) | Oireachtas source

As always, I extend a warm welcome to the Minister who attends the House more regularly than any other senior Minister, for which I thank him.

I do not have any problems with privatisation. One does not have much choice in the matter when one reaches a debt to GDP ratio of 120%. This step had to be taken. Sometimes privatisation works out for the better, not only in terms of helping the public finances. An bord snip nua estimated that sales of assets have generated approximately €10 billion thus far, which is €10 billion less misery on days such as Tuesday last.

Some privatisation measures work out extremely well. The Dairy Disposal Company, which Mark Clinton privatised before the word "privatisation" was even invented, is now the Kerry Group, a model of entrepreneurship in the Irish economy. Aer Lingus is in much better shape than it was when it had a fraction of its current passenger numbers and approximately 7,000 staff. I do not share the nostalgia for the East German type telephone service we used to have when one had to obtain a letter from the Minister to secure a telephone.

The proposed privatisation of Bord Gáis Energy could benefit the wider economy. I note from a Forfás report of December 2011 that industrial gas prices in Ireland in the first half of 2011 were the seventh most expensive of 23 EU member states. Will the commercial impetus created by this legislation reduce gas prices? In developing the economy, we must set a target of securing a better energy performance.

A Deloitte report of 2005 estimated that the ESB had excess costs of approximately €100 million. This issue must also be tackled.

The OECD economic survey of Ireland of 2011 recommended the discontinuation of supports for offshore wave and tidal energy. Sometimes the Department appears to operate in what one would describe as almost in a Walter Mitty style economy, one in which one hears clichés such as security of supply and defending the network. Such matters must be evaluated rigorously and I have no doubt the Minister will do so. In that context, I am pleased to note the following statement in his contribution:

I have on previous occasions stated that the proposal by Shannon LNG to develop a liquefied natural gas, LNG, terminal in Tarbert is welcomed by the Government. Such a facility, together with the bringing on shore of Corrib gas, would provide important security of supply for Ireland. The employment boost from the construction of the LNG plant would also be welcome. In this context, the Government fully recognises the strategic importance of retaining the gas network in State ownership.

In the Dáil on 29 November 2011 the Minister saw things somewhat differently from how he does today. He was afraid that the interconnectors would be underutilised and become a stranded asset. As he knows, Professor Colm McCarthy, our mutual friend, investigated this and found that the apparent preference of the Commission for Energy Regulation for full remuneration of the BGE interconnector assets despite the absence of any formal underwriting of interconnector II by either customers or Government, was not consistent with a cost-reducing remit for energy policy. If we retain the network in public ownership, it cannot have that kind of holy-grail-type of status. A network might be built in the wrong place or new suppliers could come on stream. The major claim by those involved in the Shannon project is that they can pick up gas internationally at a much lower price. Therefore there is a price for artificially maintaining wind energy, tidal energy and a pipeline established when a different energy market existed.

I am sceptical as to whether taking the networks into public ownership really represents an asset. As Senator Mac Conghail said, I would welcome any thoughts the Minister might have on the regulatory impact assessment of it. It would be possible to get caught with almost a CIE-type inheritance which is then protected against all developments. On the next Stage the Minister might wish to respond to that. The energy must serve the wider economy and should not be an end in itself. I am a sceptic about taking historical networks and saying they must be defended forever at the cost of the consumer. Doing so results in another sector of the economy sheltered from competition and interferes with our overall economic competitiveness.

I welcome the Minister's commitment and energy in his participation in debates in this House. I assure him of any support I can give from these benches to the development of a low-cost and effective energy sector. The privatisation will be good for the national finances and will not do any harm for competitiveness. However, some of the other policies should continually be kept under review given the concerns of Forfás and the National Competitiveness Council that we still have an excessively high-cost energy sector.