It would appear from newspaper headlines that the semi-state sector reels from one crisis to another while the primary shareholder increasingly looks bewildered, unsure and behaves like a reluctant foster parent.Are these crises self-inflicted by bad management? Or could it be the inevitable result of the structure in which they have to operate?

What is true is that the economic environment in which these companies now operate has changed fundamentally. Their markets are increasingly either fully competitive or regulated, the marketplace itself is defined as global, their need and appetite for capital grows, while all the time there are exponentially increasing demands on management for swift effective action.

Rather than debating the best policy to allow these companies to flourish and grow, the main debate has been about ownership, with one view being that the sector should remain in State ownership as an asset belonging to the people of the Republic.

But does this policy allow the companies access to the necessary capital to succeed? Does it allow them to be managed within their competitive markets? Will the companies be allowed to develop both domestically and internationally without political interference? Has it in recent times allowed these companies to prosper and grow?

The consistently negative answers to these questions have allowed another view to develop: that the panacea for the semi-state sector is to privatise, either through an IPO or a strategic alliance that allows management control to transfer to the strategic partner. Such a solution, in the opinion of some, will allow management to manage and give the companies access to the necessary capital.

But while there are immense short-term advantages to this approach, there are, in my opinion, dangerous long-term consequences.

Companies such as the ESB, Bord Gáis, Aer Rianta or Aer Lingus, while significant companies within the Republic, are mere minnows on a global scale. Look what happened with Eircom - within a short period of time our former large semi-state telecommunications company, in an area considered vital for future industrial development, became a division within some foreign portfolio of investments.

But do we want investment in the utilities vital to the Republic's future economic well-being decided outside the State?

The public policy response to the semi-state sector can no longer be confined to the question of ownership. It must include the medium- and long-term objectives for the Republic's economy. Is there a role for the semi-state sector?

What can be done to enable it to contribute to the achievement of these objectives?

I would challenge anyone to respond to these fundamental questions with the answer that control of these vital sectors of our economy should be allowed transfer abroad. To broaden the debate I suggest the following should be considered:

A holding company with a commercial mandate and legal independence from Government, similar to the National Treasury Management Agency or the Revenue, be formed. Call it Holdings Limited.

That the semi-states operating within competitive markets and considered as important for future economic and strategic development be incorporated. This could include such companies as the ESB, Bord Gáis, Bus Éireann, Aer Lingus, Aer Rianta and Bord na Mona.

That control of the companies selected be transferred to Holdings Ltd.

Holdings Ltd to be given a mandate to commercially develop each company provided it retains a minimum shareholding of 51 per cent.

Within that mandate, each subsidiary company may have third-party shareholdings, (including an ESOP) through entering into joint ventures, strategic alliances or whatever appropriate structure decided upon.

The board of Holdings Ltd should be appointed by Government after full consultation with the appropriate committee of the Houses of Oireachtas.

The chairperson and senior executive should be obliged to report to and to place the annual report before the appropriate committee.

Holdings Ltd will in future act as the shareholder for the subsidiaries. This should allow them access to the necessary capital for investment purposes, provided the criteria for investment have been satisfied.

Obviously, to facilitate this, Holdings Ltd will also need access to risk capital. This could be facilitated, provided always that 51 per cent of the voting stock remains for the benefit of the Irish people through its control by the State

Should outside risk capital be raised, the investors will need protection so their interests are not suppressed. These investors, which may include pension funds, will need independent representation on the board of directors.

Governance and return on capital issues will be central to the success of Holdings Ltd and will have to be fully considered, taking into account the legitimate demands of the commercial sector.

The semi-states historically have been major, if not pivotal, contributors to the Republic's economic development. If clear, well-focused and properly debated policies are adopted they will again play the dynamic role of which they are capable.

Greg Sparks is a partner in the accountancy firm, Farrell Grant Sparks. The views expressed in this article are personal.