THE REPORT that advocates the sale and break up of the ESB is inaccurate and unnecessarily negative, according to the State company’s chief executive, Padraig McManus.

Last week a Government-appointed group led by economist Colm McCarthy recommended that, along with a number of State companies, the ESB should be broken up and its electricity supply and power production businesses be sold.

Mr McManus yesterday criticised the report for being negative towards the company and said that remarks relating to its pension fund and balance sheet were “way off”.

Mr McManus said the report states that the ESB faces challenges in relation to its balance sheet. He argued that the company’s position is far stronger than that of its peers in Europe.

He said that before it bought Northern Ireland Electricity (NIE) last year for €1.4 billion, the ESB’s debt-to-earnings ratio was 36 per cent. After the NIE deal, that figure rose to 46 per cent.

Mr McManus added that the average for most European utilities was over 60 per cent.

He also said the report misinterpreted the ESB’s calculations on initiatives that it has taken to deal with a pension deficit that had reached €2 billion by the end of 2009.

The company agreed measures with its workers last year to tackle the deficit, including a three-year pay freeze, an end to final salary indexation and increased employer and employee contributions to the fund.

Mr McManus said that the report was unnecessarily negative about the State company, and seemed to imply that the NIE deal was bad for the business. “The NIE acquisition is very good for the ESB,” he said.

Addressing the Chartered Accountants’ Leinster Society lunch in Dublin, the ESB chief executive said he would have preferred if the McCarthy group’s report had acknowledged that the company has contributed €1.2 billion to the exchequer and the State over the last three years.

Mr McManus, who is due to retire from the company this year, acknowledged that the ESB has to cut its costs. But he said it has already spoken to staff about plans to cut €140 million from its wage bill. He added that sale of the company was ultimately up to the Government and that the ESB and its board would abide by whatever decision the Government makes.

The McCarthy group was set up to assess State companies and assets and look at the option of selling them.

Its report recommended the break-up and sale of the ESB and Bord Gáis and the disposal of RTÉ’s broadcasting network and the merger and sale of some port companies.