Domestic consumers will face higher electricity bills when competitors enter the Irish market, the semi-state's new chief executive, Mr Ken O'Hara, has said. He has also disclosed that the company is to invest up to £150 million taking equity stakes in projects outside Ireland.
Mr O'Hara said that domestic users are paying considerably less than their fair share of costs and that there will have to be a re-balancing of tariffs to reflect the true cost of supply.
He said that the ESB would not be the only player in the market within the next five years and it was gearing itself to meet that competition. One of its plans, he said, was to radically alter the focus of ESBI, its international arm which carries out consultancy and project management work overseas.
The company is preparing to invest £100-£150 million taking equity shares in projects as well as borrowing to invest over the next few years. The company is looking at projects in former eastern bloc countries and the EU, including Spain and Portugal. To date, its only equity investment is in a power generating station in Corby in Britain where it has a 20 per cent stake.
Mr O'Hara said the company would continue to operate on a caseby-case basis whereby it teams up with various international partners, rather than one particular group, to embark on projects. Mr O'Hara declined to forecast when a deal might be announced between the ESB and British Telecom, which is negotiating the use of the ESB's infrastructure.
Mr O'Hara was selected as chief executive by the ESB board in June and was due to take up the post in September. His remuneration package was said to be around £200,000 and was drawn up along the lines of the Buckley report. This report, published in March, was endorsed by the previous government but never implemented.
When the current Government took power in July it announced that it was postponing the implementation of the report indefinitely. This meant that the salary offered to Mr O'Hara was considerably less as the post came in under the much lower Gleeson pay guidelines. There followed a stand-off between the ESB board and the Government.
In the end, the board climbed down and Mr O'Hara accepted the post at the much lower salary of around £105,000 per annum.
Mr O'Hara, who beat off stiff competition for the post, including, it is said, Mr Pat Haren, the wellregarded chief executive of Northern Ireland Electricity, said he had considered not taking the job. However, he added that for the last 10 years, since he had become a director of ESB, it had been his ambition to become chief executive. He hoped the situation would be resolved when the Buckley pay guidelines were implemented. There has been speculation that provision will be made for them in the Budget.
Interview of the week: page 5
