Ahern seeks radical reform of State assets

MORE Irish private investors and pension funds should be allowed buy shares in State assets, Fianna Fail leader Mr Bertie Ahern said last night. He also said there had been too much "fence sitting" about the future of the State owned banks.

Mr Ahern, who was addressing the consultative group of chief executives of State sponsored bodies in Dublin, said that four years ago, when the sale of a minority stake in Telecom could have raised nearly £500 million, "we were warned that this would bring down the Government".

"Now we see a valuable share in Telecom sold off relatively cheaply to foreign institutions," he said. "What is the logic of letting foreign institutions buy a substantial share of State assets, but not allowing the private investor in Ireland or the institutions that hold Irish workers' pension funds to purchase such shares, particularly when the Irish taxpayers have invested £2 billion in this company?"

Mr Ahern said he saw little merit in a "no Irish need apply" policy towards companies. He pointed out that the stock exchange offered a limited range of investment opportunities in a few dozen publicly quoted companies.

"As a result, a lot of Irish money goes abroad to find gilt edged investment opportunities that some of our State companies could provide if they were let," he said.

Mr Ahern said many foreign governments of all political colours had moved towards more flexible and less defensive positions on this issue.

"Many of our State companies have considerable capital needs which at present entail large borrowings, which form part of the public sector borrowing requirement," he said. "It seems perverse that, while they can form strategic partnerships abroad, they may not look to Irish pension funds."

He said these were important matters which Fianna Fail would like to discuss when "back in Government" with management and trade unions.

"There may well be circumstances where such options will enhance the companies. It is not realistic, even if it were allowed, when we need tax reductions to become more internationally competitive, to expect the taxpayer to fund further large injections of capital into State companies."

The Fianna Fail leader said an over protective attitude to State companies was one extreme to be avoided.

"But nor is it helpful or true to suggest that the semi States need `a dose of salts or that they are run by `cosy cartels'," he said.

Mr Ahern said he regretted the loss of former Bord na Mona chief executive Dr Eddie O'Connor, who he described as "able and creative". (Dr O'Connor left following a protracted row over his remuneration, which included more than £50,000 in unvouched expenses).

"More realistic and competitive rates of remuneration are needed in the recruitment of senior executives," he said. "People who have responsibility for a large commercial enterprise are still linked with civil service grades," he added.

Mr Ahern said Fianna Fail would be critical of "gung ho privatisation policies" that were widely advocated in some quarters. He said the real problem in a small country with "what may be natural monopolies" was ensuring that the public got value for money and that the services provided were of a cost and quality that enhanced competitiveness.