State must stand firm on deals

Anthony Cronin named his book on the life and times of Flann O'Brien No Laughing Matter

Anthony Cronin named his book on the life and times of Flann O'Brien No Laughing Matter. One cannot even imagine what Flann O'Brien would have made of the mobile masts mix-up - a fable for our times. Might masthead microwaves move our mental molecules, making we moderns metamorphose into mutant mobiles? One could mock the fears of the residents of Donegal and Wicklow. One could say these fears are reminiscent of instructions to children to stay well away from the TV, an instruction given even by those who are glued to computer screens morning to night.

One could say sarcastically that it is entirely consistent to send one TD to Dail Eireann with instructions to preserve multi-channel, radiating, TV, while sending another to prevent the radiation of microwaves.

One could say to the fearful, but fearsome, residents that the building of a road will kill many more of them than mobile phone masts, and 100 other rational things based on actuarial mortality and morbidity tables. But to the residents, the mobile masts are no laughing matter.

Nor are the masts a laughing matter to Esat Digifone. Without them, there is no service, no customers, no earnings. It is no laughing matter to the Government that its slender Dail majority and precious Budget vote might be threatened by independent not-in-my-backyardism, a complaint to which none of us is immune. You'd swear a Government would at least be done the honour of being threatened by some big issue. If it must be a mast, Loran-C is of the right stature, not a squat mobile phone transmitter.

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Most of all, it is no laughing matter for the State. The implementation by the State of its contractual obligations is important way beyond the construction of one new Garda mast to take a microwave transmitter. The Government never had a real choice on the matter, but it wobbled a bit much before sense prevailed.

Leaving aside any health risk, which is indeterminate to say the least, a very precise issue was at stake: can you do business with the State? Can a business rely on the State to perform its side of the contract? This wider question is also in play in the dispute between Princes Holdings, which has MMDS licences, and the State, over licensing TV deflector systems.

Our public sector cannot afford the reputation of being unreliable. The Strategic Management Initiative (SMI) towards better public administration must surely, if it is any use at all, enhance the reliability of the State. It should help protect Ministers more from local or private pressure, and in some cases, from their own weakness. If unreliability were to creep in, then the SMI would be a waste.

The price for unreliability would be paid by private parties in the short term. In the medium and long term, the taxpayers would pay the price in lost litigation, and the risk premium business would put on dealing with the State.

It used to be thought that political risk was about coups d'etat or nationalisation in strange, far-off countries. But the unreliability of the State in any form is political risk. The message from the wobble over the Esat mast is that political risk is not far away or confined to massive change. It is present in every dealing with the State, and in every interaction with public administration and regulation.

In the context of the development of public-private partnerships to build infrastructure more rapidly, any increase in political risk is bad news and increases the cost of private finance. The risks in the planning process are all too apparent to Esat with 100 out of 145 applications for planning permission for masts already refused. No wonder a strong private sector view is that the State should bear the planning risk in any public-private partnerships.

This episode provokes assertions about the "price of democracy", "getting the politicians we deserve" and even "too much democracy". These gut reactions are wrong. While the temptation is strong to think of powerful independent TDs as representing too much democracy, it seems to me that they represent too little democracy. The ability to hold the wider public interest hostage for the sake of a local public, or concentrated private, interest represents a failure of democracy.

The voters cannot be blamed. If we could vote in some way for the general composition of the Dail, then the public interest and democracy might be better served. The German list system achieves something like this. Meanwhile, business, and those who care about public administration, will breath a sigh of relief that the Esat contract with the Garda is to be enforced.

Oliver O'Connor is an investment funds specialist