Government seeks extra €65 million payment from ESB
Request part of plan to raise additional €100 million from State companies
The ESB confirmed yesterday Minister for Communications, Energy and Natural Resources Pat Rabbitte wrote to it this week asking it to pay the additional dividend of €65 million this year.
ESB chief executive Padraig McManus. Following its annual general meeting last month, the group paid a final dividend of €74.4 million to the exchequer. Photograph: Bryan O’Brien
The Government is seeking an extra €65 million dividend from the ESB on top of the €74 million that the State-owned energy group recently paid to the Exchequer.
The move is part of an overall plan to raise an extra €100 million in such payments from State companies that was agreed in Budget 2013.
The ESB is being asked to cover two thirds of this sum as it is the largest and most profitable of those businesses, but the Government intends asking the others to contribute as well.
The company confirmed yesterday that the Minister for Communications, Energy and Natural Resources, Pat Rabbitte, wrote to it this week asking it to pay the additional dividend of €65 million this year.
“ESB will now consider the Minister’s request having regard to the financial position of the company,” it added in a statement.
Following its annual general meeting last month, the group paid a final dividend of €74.4 million to the exchequer.
It has agreed to make a special payment of €400 million next year, pending the sale of its stakes in power plants in Britain and Spain.
Mr Rabbitte also told the company that the Government and NewEra, the agency that advises it on State assets, are looking at redefining ESB dividend policy for the medium and long term.
ESB unions reacted angrily to the news yesterday. They claim that the payment should not be made as there is a €1.7 billion shortfall in the staff pension scheme.
Brendan Ogle, secretary general of the ESB group of unions, described it as a “kick in the teeth from an owner that has absolved itself of responsibility for the pension scheme of its staff”. He added that the group is meeting today to discuss the legal and political action it intends to take to tackle the deficit.
Meanwhile, a legal action by four staff, Owen Kilmurray, Brian Baitson, William Flavin and Margaret O’Connor, to halt the dividend payments is likely to get under way in the commercial court early next week.
They claim that the payments are unlawful as the ESB has failed to account for the pension deficit in its annual report.
Lawyers for the staff had hoped to make an initial appearance in the High Court this week to have the case added to the commercial list.
It is understood that they now intend to open proceedings next week, ahead of the end of the current court term.
The chairman of the scheme’s trustees, former ESB financial director, Pat O’Doherty, recently warned the company against paying the €400 million special dividend while the pension plan was under “severe financial strain”.
The ESB says that it has already agreed a plan with the Pensions Board to bring the scheme into line with funding standards laid down in legislation by 2018.