No privatisation motion is expected to be put at today's meeting of the ESB board, although it is well known to be the preferred option of the company's chief executive Mr Ken O'Hara and other senior managers. This follows a warning from the company's group of unions that it would oppose such a move at the present time.
If a decision on privatisation is shelved it is unlikely to resurface for at least another year. Such an outcome will be a major setback for Mr O'Hara, who outlined his own preference for the privatisation option last May and again at the launch of the 1999 annual report in June. His forthright comments on June 8th isolated him from some board members and alarmed the unions. Senior union sources feel the company has lost its way on the industrial relations front at a time when major restructuring is needed. In a strongly worded letter sent last week to the chairman of the ESB Mr Billy McCann by the secretary of the company's group of unions, Mr Paddy Reilly, serious questions were raised about the "quality of management" in the company and its ability to survive in a competitive climate.
"It is our considered view that the board having a discussion on ownership suggests that there is a view that the ESB is ready for privatisation. It is in our view difficult to sustain an argument for privatisation while at the same time seeking a rationalisation programme of up to 2,000," Mr Reilly says in his letter.
"Should such a belief exist it is, in the unions' view, based on a misunderstanding as to the ESB's current position, not only regarding its ability to compete effectively but also in the present state of development of the market within which the company will be competing." The letter goes on to outline union concerns about issues such as the role of the regulator and the level of state subvention to ensure security of supply for the state. Mr Reilly says the unions have no ideological position on privatisation, but they do not see it as a "panacea" either and see the timing as wrong. The Minister for Public Enterprise Ms O'Rourke is understood to believe there is much merit in the unions' position and, after the debacle of the Eircom privatisation she is anxious to avoid any premature launch of another major semi-state company on the market.
In the unlikely event that the privatisation issue should go to a vote at today's meeting it is expected that the four worker-directors and two Labour Party members on the board, Mr Paul Sweeney and Ms Anne Taylor, will oppose it. Mr O'Hara could expect the support of the chairman Mr Billy McCann but the voting intentions of the three nominees of Ms O'Rourke are less clear. Even if Mr O'Hara could count on the support of Mr Tadgh O'Donoghue, Ms Georgina Kenny and Ms Caitriona Murphy, it would leave the board deadlocked.
Mr O'Hara is expected to bide his time yet again on the privatisation issue, although the January deadline was set at the board meeting in September after several previous deferrals.
