Not quite free of its troika handcuffs, the Government is reasserting its sovereignty by backtracking on the privatisation of key State assets and very few, if any, are complaining.
It was the doomed Fianna Fáil-led coalition that suggested to the EU-IMF troika in 2010 that the sale of a number of State assets would raise up to €3bn to help pay down the national debt.
At the time, the country was on its knees, terrified that hedge fund vultures were going to steal our best performing assets for a song and cream off the profits for eternity from state companies that we the taxpayers had built and funded over decades.
It led to criticism echoing former UK prime minister Harold Macmillan’s accusations against Margaret Thatcher in the 1980s, that her privatisation policies were akin to “selling off the family silver”.
While the privatisation debate still rages on in the UK, it’s absolutely clear here that among the Labour Party family, there will be no tears shed as the sell-off policy remains firmly on the shelf.
The fact of the matter is unless one of the bidders comes back with a better offer, which is conceivable, the sale of Bord Gáis Energy has been effectively abandoned in the short to medium term, just like the sell-off of a list of assets paraded in front of the troika last year for privatisation.
First up were the harvesting rights for one million acres of the state owned forests operated by Coillte, which were supposed to fetch between €400m and €774m.
A report by Peter Bacon showed the sale of 1m trees would result in costs of €1.3bn in profit flow and pension rights. And it was estimated 12,000 rural jobs would be put at risk.
Following a number of protests, last June Agriculture Minister Simon Coveney decided the Government would focus on merging Coillte with Bord na Móna to develop commercial bio-energy and forestry interests. There will be a review in 18 months.
Next up is the State’s 25% share in Aer Lingus, which was expected to add between €200m and €250m to the State’s coffers, although it should be noted the market worth of the shares yesterday was €182m. Earlier this month Transport Minister Leo Varadkar ruled out any sale in the near future because it was difficult to see the “right conditions”.
Those conditions include the right price and equally as important a guarantee any new owners will continue this island’s connectivity to the world, especially with Aer Lingus’s vital and valuable Heathrow slots for the business community. No sale for now.
In October, the Government did agree to sell the National Lottery licence for €405m for 20 years to a consortium comprising An Post and the owners of the Camelot Group. With 65% of gross gaming revenues (sales minus prizes) going to good causes, there was little controversy.
And so the coalition agreed it would be the big two, Bord Gáis Energy and non-strategic parts of the ESB which would make up the €3bn.
A spokesperson for the Department of Public Expenditure said the ESB has sold 50% of its shareholding at the international tolling plant at Marchwood in the UK, and is in the process of finalising the sale of its 50% shareholding in its Amorbieta plant in northern Spain.
In October, it announced its decision to sell two peat stations, West Offaly Power and Lough Ree Power, and more assets will be sold in the future. The value will run into hundreds of millions.
But they will go nowhere near the €3bn originally penned in. However a spokesperson said just €110m for stimulus projects was earmarked for Budget 2014 and it be made up by the ESB asset sales.
In the end, it was quite bizarre reasons such as cheap coal and gas exported from the US which didn’t make market conditions favourable for a sale at around€1bn, well short of the expected €1.4bn or €1.5bn
There were few in the country three years ago who thought selling off the family silver to bail out gambling bond holders were the right conditions either.
But in 2013, following a decision to exit the bailout cleanly and with very strong jobs growth, the coalition now has the confidence to tell the rest of the world to move along now, there are no fire sales to be seen around here — because if there’s no massive pay off, there’ll be no sell-off.
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