No clarity on Bord Gáis proceeds

Only a tenth of the proceeds from the sale of Bord Gáis will be invested in projects in Ireland with no clarity as to how the remaining €900m will be spent.

There has been a long-running battle with the troika as to what percentage of the gains from the privatisation of Irish semi-states will be spent on job stimulation measures and how much will be spent repaying the Government debt.

Britain’s Centrica and its consortium partners announced this week that they will buy the retail arm and energy generation assets of Ireland’s State-owned Bord Gáis for €1.1 billion with the deal expected to close by June of this year.

The Government has already set more than €100m of this money aside for a range of projects ranging from roads to schools.

Almost a fifth of the money will be spent on the creation of a single campus for Dublin Institute of Technology as part of the Grangegorman project.

“The Minister for Public Expenditure and Reform factored a total of €110m into the Estimates for 2014 in respect of projects supported from the sale of State assets; €45m of this will fund part of the advance works associated with the new PPP Programme. Specifically, €25m will be spent on the Grangegorman project and €20m on road PPPs. The remaining €65m will be spent on the continued roll-out of the additional Exchequer investment projects announced in 2013 (€25m on Energy and €40m on Schools),” a spokesperson for the Department of Communications, Energy and Natural Resources said.

A spokesperson for the Department of Public Expenditure and Reform refused to expand on how the remaining €900m in proceeds would be spent.

Minister for Public Expenditure and Reform Brendan Howlin refused to address what proportion of the monies received from the sale of one of the country’s largest semi-state bodies would be used to repay the country’s bankers.

“As I have indicated all along, part of these monies will be used to invest in infrastructure as part of the stimulus programme. Due to government accounting rules not all of this money can be counted as general government receipts in one year — the receipts and hence the expenditure are spread over a multi-annual period.

“My department is undertaking a review of our capital investment programme and we will be considering how best we can use the monies available to us as part of that review.”