BUSINESS OPINION: The full truth surrounding "Departuregate" as it may yet come to be called will probably never be known. At this stage all we can say with some certainty is that someone decided to tell a Sunday newspaper about the alleged misuse of Aer Rianta funds 10 years ago by the then Transport Minister, Seamus Brennan, to buy Christmas gifts for party hacks.

Mr Brennan has issued a carefully worded denial and pretty much every thing else is speculation. But it is fair to say that the most obvious reason for somebody to make this information public is to damage Mr Brennan, who is once again holding the transport brief. Given that this all allegedly happened 10 years ago we can pretty much rule out somebody blowing the whistle for reasons of conscience or moral outrage.

We also know that Mr Brennan is the least favourably disposed minister for transport - as far as Aer Rianta is concerned - in many years. He has signalled his desire to break up the company and establish the airports at Dublin, Shannon and Cork as separate entities. He has also forced Aer Rianta to implement the previous government's directive to build a pier for low-cost airlines. Worst of all, however, is his invitation to third parties to build a competing terminal at Dublin airport. Top of the list of those wanting to get into the terminal business is Ryanair which is the State airport company's chief critic and one of its largest customers.

It is hard to escape the conclusion that somebody connected with Aer Rianta had a hand in the making public of the cigar and brandy story and that they did so because they did not like what Mr Brennan is doing with regards to Aer Rianta.

If this is the case, it is a very sinister development. The individual or individuals involved would appear to be putting the interests of a State-owned company ahead of the interest of the State.

The various initiatives proposed by the Minister for Transport may amount to little short of the destruction of Aer Rianta as we know it, but they are part of wider national policy to reduce the cost of flying to and from Ireland.

While those in the Aer Rianta camp are entitled to fight their corner, taking covert action to remove an unhelpful Government Minister is a step to far. Someone would appear to have lost sight of the fact that Aer Rianta exists to serve the interest of the State - as expressed by the elected Government - and not just to perpetuate itself.

THE problem is not confined to Aer Rianta and last week we saw the results of a not dissimilar conundrum at the ESB. An organisation called ESB National Grid issued a press release saying that Ireland would run out of electricity in 2005 unless some thing was done to encourage investment in power stations.

As the name suggests, ESB National Grid is a sister company of the same ESB which has fought tooth and nail over the past few years to make it as difficult as possible for anybody foolish enough to want to build a power station in Ireland.

In particular, the ESB was unwilling to hand over ownership of the national grid to a third party. This was seen as a fundamental step towards the liberalisation of the electricity market in most comparable markets. Instead, a hybrid structure has been put in place, to be known as EirGrid, which will encompass ESB National Grid. It will give the ESB a significant say in how the national grid is developed, and crucially enables it to retain ownership of the assets.

In addition, the ESB is allowed to be a player in the liberalised sector of the market and has also been allowed to get involved in the independent power generation sector via a joint venture with Statoil.

All of this has been good for the ESB which last year turned in profits of €199 million, but from the point of view of opening up the electricity market to competition it has been a disaster.

Once again a State-owned company would appear to be acting in self-interested fashion that is contrary to the stated policy objectives of the State.

One reason for this confusion is the increasing emphasis at semi-state companies on their "commercial mandate". This in turn is driven by the refusal of the European Union to allow governments prop up non-viable state industries, with a few exceptions.

The obvious solution to this problem is to end State involvement in these companies, which would allow the interests of the State to be pursued through a policy of tough regulation.

However, one only has to look at the telecoms sector to see the flaws in this approach. Eircom, as the privately owned Telecom Éireann is known, has run rings around the Office of the Director of Telecommunications Regulation since it left State-ownership. It remains completely dominant in the fixed-line market and is increasing its market share.

The experience of regulators in the electricity and aviation sector has been equally fraught, with the State-owned companies they regulate frequently challenging them in the courts.

Aer Rianta is in the middle of a protracted challenge to a cap put on its charges by the Commission for Aviation regulation, while Eirgrid and the ESB recently settled litigation involving the Electricity Regulator.

Regulation is clearly no panacea. In fact it is all a bit of a mess, but the reason we elect governments is to sort these things out for us. As an interim measure this administration could ensure that the sort of people they put on the board of State companies do not lose sight of who they are there to represent.

One way to do this is stop handing out seats on State company boards to party favourites as some sort of quasi-State honours system.