Minister has no plans for ESB privatisation

The privatisation of the ESB has been ruled out in the short to medium term by the Minister for Communications and Natural Resources, Mr Ahern.

The Minister said he was opposed to the privatisation of the electricity transmission and distribution systems. "I believe that infrastructure such as wires and pipes are critical national assets and should remain in State ownership," he said.

But he also indicated that privatisation of ESB's power generation business was unlikely, at least for now. "I am opposed to any privatisation which would result in a private monopoly or near monopoly in the power generation sector."

Speaking at the Oireachtas Joint Committee on Communications, Marine and Natural Resources, Mr Ahern said he had no plans to privatise any part of the ESB in the medium term.

Pressed by committee members on whether he was ruling out privatisation entirely, he replied: "There is no decision or moves in that respect."

The meeting also concentrated on the related issue of who should run the electricity transmission system. Since February 2001, Eirgrid was meant to be acting as the transmission system operator but, due to differences over the transfer of staff from ESB to EirGrid, agreement has not been reached and the network is still managed by ESB National Grid.

Mr Ahern said the failure to get EirGrid up and running was "disappointing". However, he assured members of the committee that ESB National Grid operated independently of the ESB.

Several members called on the Minister to intervene directly to resolve the dispute, but Mr Ahern said that was not his role.

Pressed on his view of the hold-up, he said: "The conditions in the ESB are probably among the best in the country." He remained confident an agreement could be reached soon.

He warned that, whatever solution emerged, it would not involve EirGrid simply becoming part of the ESB once more. "I want to state clearly that I am opposed to merely reversing EirGrid back into the ESB. I believe this would send a negative signal to the market. I also believe that the EirGrid model, once in place, will be effective and beneficial to all players in the market."

The Minister said he was concerned the recently agreed system for emissions trading in the EU could create "windfall gains" for electricity companies.

This is because the companies have been given allowances to produce C02. These have a tradeable value and power generators could theoretically charge customers for forgoing the chance to profit by their sale.Mr Ahern said this was a concern and he was in "dialogue" with the Commission for Energy Regulation (CER).

Green Party energy spokesman Mr Eamon Ryan said the Government was effectively allowing big companies and the ESB to make millions of euro from the new regime.