SECTIONS OF the ESB, RTÉ and CIÉ could be sold into the private sector if the Government follows through on the recommendations of the review of State assets led by economist Colm McCarthy.
The review estimates the absolute value of the businesses singled out for sale to be €5 billion.
But lead author Colm McCarthy stressed at the report’s publication that this is simply what they are worth on paper. He warned that the figure might ultimately bear no relationship to what they could end up fetching in a sale.
He said that the report is simply meant to advise the Government. The economist stressed that the Cabinet and Oireachtas should have the final say on whether or not to sell any of the businesses in State ownership.
Mr McCarthy also argued that, by and large, many of the businesses that the group believes should be sold are already competing with private-sector rivals in their respective markets.
On that basis he argued that there was no real reason to keep them in State ownership and that in cases such as Bus Éireann’s Expressway business, privatisation would be straightforward.
The State needed to carry out a review of pay in the Republic’s State companies, Mr McCarthy said. The report notes that this exercise would establish if these costs were competitive with those in comparable Irish and oversees businesses.
“There is a perception that people in State companies are paid too much,” Mr McCarthy said. “There should be a proper review to see whether it’s true or not.”
A recommendation is made that the ESB, the biggest of the State companies, be broken up and its power plants, energy supply businesses and international operations be sold.
Ownership of the electricity grids in the Republic and Northern Ireland, which the ESB owns, should be transferred to State company Eirgrid which already manages them.
The Bord Gáis Éireann transmission network should also be retained in State ownership and merged with this business. But the report states that the company’s gas and electricity operations should be sold as a single entity.
The group says that State broadcaster RTÉ’s broadcasting network, known as RTÉNL, should also be sold but that safeguards should be put in place to ensure that it is available to the State in the event of a national emergency.
The group calls for the sale of CIÉ’s coach tour business, the Expressway division of its subsidiary, Bus Éireann and Rosslare Port, which the public transport group also owns.
It also suggests that Dublin Bus could be privatised but regards this as a longer-term project and says that a precise model for subsidising this business would have to be established first. It recommends the National Stud, Horse Racing Ireland and Bord na gCon’s racetracks, along with their Tote interests, be sold and the 11 State-owned ports should be rationalised into competing multi-port operations based around Dublin, Cork and Shannon Foynes and then possibly privatised.
The report also hones in on the number of regulators operating in the State. Telecoms, broadcasting, energy, financial services and health insurance are all overseen by independent agencies. Mr McCarthy and his colleagues recommend that all regulators be overseen by the Department of Enterprise, Trade and Innovation.
It also says that there are too many of them and that health insurance could be absorbed by the financial regulator and that telecoms, broadcasting and postal services could be overseen by one agency instead of two.
The report also recommends that State companies should pay 30 per cent of their profits every year to the exchequer.
He acknowledged that the sale of any State company would involve a “long lead-in time” and would more than likely have to take such issues as debt and pension fund deficits into account.
MAIN POINTS
TheESB and Bord Gáis Éireann should be broken up, their generation, supply and distribution businesses sold, and their transmission networks merged and kept in State ownership.
Payand conditions in all State companies should be reviewed and compared with peers in other European countries to ensure that costs are competitive.
SellRTÉ's broadcasting network. The 7 per cent share of the licence fee used to fund independent production should be increased.
AllState companies, except Dublin Airport Authority, should pay a 30 per cent share of their profits to the Exchequer.
TheState should sell its remaining 25 per cent share of Aer Lingus as soon as is opportune.
CIÉshould sell CIÉ Tours, the Expressway division of Bus Éireann and Rosslare Port. It should consider privatising all or part of Dublin Bus.
Thevarious State regulators should be placed under the authority of the Department of Enterprise. One body should regulate broadcasting and communications (including post), other mergers should take place and the creation of new ones should be avoided.
HorseracingIreland and Bord na gCon should sell their racetracks and tote betting operations. The State should sell the National Stud.
Anysale of State assets or companies should be assessed from the standpoint of its contribution to economic recovery and fire sales should be avoided.
