Cable plans suggest float on agenda for Bord Gais

Bord Gais Eireann plans to build a broadband cable network on the back of its gas system in a move seen as a precursor to a possible…

Bord Gais Eireann plans to build a broadband cable network on the back of its gas system in a move seen as a precursor to a possible flotation.

Building work on the network, in north Co Dublin initially, will begin before the end of the year, The Irish Times has learned.

The State-owned company also wants to develop a gas business in Northern Ireland, where significant opportunities may arise in the medium term.

These plans are being developed at a time when the company is required to make proposals for its future ownership and structure to the Government.

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Flotation is one of the options under review and moves to expand into new markets could be seen as giving the business capacity to grow, crucial for success on the public markets.

Bord Gais has already revealed plans to develop an electricity generation and distribution business in the Republic. Here it is developing plans with Aughinish Alumina, US group ATCO and Rolls-Royce.

In the broadband business, the company aims to become a wholesale provider of cabling.

This means it would need agreements with telecom companies that would sell the capacity on to end users. US groups such as Global Crossing and Colt are seen as potential partners, it is understood.

Bord Gais's system in Dublin is built in such a way that broadband lines could be added to it without digging up the ground.

In Northern Ireland, the company is believed to be examining two options to develop a business.

Firstly, it might tender to build a pipeline to Coolkeeragh, Co Derry, where the ESB has been sanctioned to build a gasfired power station. Such a link could be built from Belfast, linking to the North's existing network, or from Dundalk, linking to the Bord Gais system.

Secondly, it is examining the feasibility of a South-North line feeding gas to the Northern network from Dundalk. As in the Republic, that network is under mounting pressure.

Either of these strategies would be viable only if Bord Gais secured permission to build an interconnector parallel to its existing link between Dublin and Moffat, Scotland.

Managers at the company believe a Government decision on such a pipeline is imminent. It would cost £200 million (€253 million) initially.

Bord Gais is understood to have argued strongly in recent weeks that the investment was required to counter a possible gas shortfall by the end of 2002.

Energy from the Corrib field off Co Mayo will not be available until mid-2003. Nor will the North-South pipeline planned by British Gas and a US group, KeySpan.

Peak demand would rise by more than 20 per cent by the end of 2002 even if constraints on the network were not removed, according to a study by the Economic and Social Research Institute.

Arthur Beesley

Arthur Beesley

Arthur Beesley is Current Affairs Editor of The Irish Times