CHALLENGING THE ESB

 

When the Single Market was launched in 1987, there was no shortage of sceptics who pronounced that the EU would not be able to break up the cosy state monopolies, especially in the vital energy and telecommunications sectors. But after a sluggish start, the momentum behind the Single Market project is building. Plans for the liberalisation of telecommunications services are already in train, while EU energy ministers edged closer last week to a landmark agreement on the liberalisation of the electricity sector.

The pace of developments in Brussels should help to concentrate minds in the Republic's semi State sector. In fairness, the Government, the semi States themselves and most of their workers are alive to the danger and opportunities ahead. But the continued opposition of key shift workers in the ESB to the company's rationalisation proposals is a reminder of the very real obstacles to progress.

Although EU energy ministers have deferred a final decision on electricity liberalisation the framework for agreement is already clear. This will not provide comfortable reading for the ESB: it is expected that at least 25 per cent, and almost certainly substantially more, of the Irish market will be thrown open to competition. And, crucially, it now seems very possible that the 250 top energy users, or 25 per cent of the market in the Republic, could enjoy direct access to the free market. Any such move would increase the ESB's dependence on domestic and small business consumers and would, presumably, lead to higher prices.

In all the circumstances, the company will be relieved that ministers agreed to retain a public service commitment which will allow national governments to insist that some 15 per cent of national energy needs can be filled by indigenous fuels. This decision, at least, will help to secure the 2,000 plus jobs in the midlands which are dependent on the ESB and Bord na Mona.

When discussions restart next month, the Government will be hoping that it can build on the public service obligations in the outline agreement. Under the proposals the cost of the social services provided by each electricity user would be assessed and some kind of surcharge levied on all competitors. The hope is that this will help to create some kind of `level playing field' in the electricity sector. But, even with this concession, the task of reshaping a monopoly like the ESB and transforming it into a lean and competitive energy provider is formidable.

Against this background, the continued opposition of the shift workers to the company's £270 million Cost and Competitiveness Review (CCR) makes no sense. The company is to be commended for its decision to press ahead with the CCR: a small minority of 330 shift workers must not be allowed to thwart the wishes of a workforce numbering some 9,000 people, who voted overwhelmingly in favour of the deal. The shift workers must be told in very stark terms that they are fighting a losing battle: the ESB must adapt and change as the Single Market takes hold.