Rabbitte says State to keep majority shareholding in power company

THE SALE of a minority stake in the ESB is expected to take place next year, Minister for Communications Pat Rabbitte has told the Dáil. The Minister said he would envisage “the specific transaction being progressed throughout 2012”. Mr Rabbitte also said claims that the decision to sell a minority stake in the ESB will inevitably lead to the State losing its majority shareholding are incorrect.

He said the State would continue to have a strong majority shareholding in the ESB and that the overall objective was “a transaction that produces a compatible minority partner for the ESB”.

“The State must continue to have a strong and direct presence in generation, networks and supply”, but it “must be done in a way that protects overall economic competitiveness and does not deter private sector involvement in generation and supply”, Mr Rabbitte said.

During a Sinn Féin Private Members’ motion opposing the sale of State assets, Mr Rabbitte said he did not wish “to see a scenario where Ireland would be unduly dependent on foreign-owned energy companies in a situation where Ireland would be a small component of a larger European market”.

The Government wanted to “extract value” from strong and profitable State companies. Extracting such value and implementing any other structural change in the energy sector “must meet the simple test that they are in the public interest in its widest sense.

“I am strongly of the view that the sale of a minority stake in the ESB can be structured in a way that passes this test.”

Minister for Public Expenditure Brendan Howlin said the sale of State assets was “not a traditional policy of the Labour Party. It is a point I accept. In normal times we would probably not be proposing the sale of State assets. These are not normal times.”

However he said his party remained a “key advocate of State involvement in the economy”. Mr Howlin also said no decisions had been taken yet beyond the agreement to sell a minority stake in the ESB.

“However, the Government has agreed that it is prepared, in principle, to undertake further asset sales and a separate process will be initiated to consider a number of potential assets in this context.”

Introducing the motion, Sinn Féin spokesman on finance Pearse Doherty said his party was steadfastly opposed to the sale of any part of the ESB.

“It is bad energy policy, it is bad economic policy,” he added. “It will be detrimental to Irish consumers, taxpayers and workers.”

Claiming that there was considerable discomfort among Labour backbenchers on the issue, Mr Doherty said there was something deeply dishonest in the way the Government justified its decision to sell off a portion of one of the most successful semi-State companies in the State’s history.

Claims that selling off a minority stake did not represent a significant loss to the State, and that the proceeds would be invested in economic recovery, were simply untrue.

“The part-privatisation of the ESB will be a disaster in the long term,” he added.

Mr Doherty said there was no rationale for the decision other than that pressure was being put on the Government by the IMF and the EU to sell off State assets to service the debt.

It was a pressure that was clearly too great for the Labour Party to resist.

What was surprising, he said, was the speed with which the Labour Party had completely capitulated to Fine Gael’s demands on the issue.