Rabbitte pins Labour revival on jobs ahead of next election
Minister defends Bord Gáis Energy sale and is upbeat on renewable target
Minister for Communications, Energy and Natural Resources Pat Rabbitte: “You have to be able to repose confidence in the planning system, that it is rigorous and that is why consultation has to be meaningful.” Photograph: Brenda Fitzsimons
He was accused of selling the family silver, but the offloading of Bord Gáis Energy for €1.125 billion brought 2013 to a satisfactory end for Minister for Energy, Communications and Natural Resources Pat Rabbitte.
The Government, he says, has examined the mistakes of asset disposals past and hopes the consideration given to the energy business sale will not result in a similar outcome to the Telecom Éireann privatisation 15 years ago.
“The lesson was that we were starved for a decade of necessary investment in broadband because of the manner in which [Telecom Éireann] was asset-stripped by selling the entire company, including the networks,” Rabbitte said in an interview with The Irish Times.
“In this case we’ve retained the [natural gas] networks in public ownership and what we have got is a new player in the marketplace that is capable of growing and providing competition and the theory is that ought to be good for prices.”
At the beginning of last month, it appeared as if the effort to sell the business had failed, as what was on the table fell short of Government expectations. The pulling of the sale followed, but two weeks later it was announced that a consortium comprising Centrica, Brookfield Renewable Power and iCON Infrastructure had struck a deal.
Rabbitte said the offer of an additional €120 million brought the sale over the line and secured one of “the most significant” developments of 2013 for his portfolio.
“I have quotes from financial analysts who said what a botched job the Government made of [the sale], ‘Didn’t they know well it wasn’t worth €1 billion in present market conditions’,” he said.
“Two weeks later the same people have written that we have undervalued it now, having got €1.125 billion. Only politicians are held to account for what they said in the past – financial analysts, never.”
With a consortium willing to pay good money, some have suggested the State would be better off holding on to Bord Gáis Energy rather than selling it.
“There is a lot of naive comment about family silver and all the rest. I don’t see it as losing an asset. I see it as having acquired a significant new player in the Irish market that has industry experience and access to substantial resources,” he says.
The Government and troika agreed on the sale of State assets worth up to €3 billion (with a portion of proceeds going back into the economy), but Rabbitte says it is “exaggerated” to suggest the Coalition has “a huge menu” to choose from.
Rabbitte said avoiding a Christmas industrial dispute at the ESB was the development in his area that made him happiest last year. Contingency plans were reportedly in place, but Rabbitte says the disruption of an electricity blackout could have had “unthinkable” consequences, given the connection between energy, electronics and employment in the State.