Troika will force sale of €2bn in state assets

THE state will be forced to sell off more than €2 billion of state assets by the troika when they finish their latest assessment of whether the country is meeting its bailout conditions, Labour Minister Pat Rabbitte has said.

The indications are that the EU, ECB and IMF will find that the country is complying with the austerity terms and meeting the targets, he said, but there were a number of decisions to be made on the sale of state assets.

There are red lines in terms of what the government is prepared to sell off, he said, and these include keeping a majority interest in the ESB and the Dublin Port.

The whole menu of state assets were being assessed but no decisions had been made yet, he said. While the Programme for Government committed to selling non strategic state assets up to the value of €2bn, the IMF favoured €5bn worth of sales earlier this year but were now calling for “an ambitious programme”.

“It does not mean €5bn, but not €2bn either. We will be wiser shortly as to what they are insisting on,” said Mr Rabbitte.

The remaining stake in Aer Lingus and the ownership of Coillte were being looked at, but if the Government commits to selling them off, it would not want to do so under the current market conditions but wait until it had improved.

“It would not be appropriate now to sell a minority stake in the ESB on this market. If the government commits to this they would expect that it should be done in a more propitious circumstances, but we will have to wait and see,” he said. “Nothing will be bargain basement.”

The state wanted to retain control of the ESB because of its strategic importance. Dublin Port also had state significance. “There are red lines but I hope we will get some recognition for the manner we are complying with the MoU [memorandum of understanding on the bailout terms],” he said.

Senior officials from his Department of Communications, Energy and Natural Resources, and from the Department of Public Expenditure and Reform together with other agencies including NTMA were carrying out due diligence on the issue of the ESB and how to find a compatible investor.

The decision to sell a minority state in the ESB was being discussed with the troika but the government was interested in being allowed the flexibility to reinvest some of the proceeds in job creation.

“Up to now the troika has taken a hard line, wanting to write down debt. We would like to see it some of the funds going to growth. Because we have complied with all their strictures we would hope they would facilitate us in investing in growth,” he added.

Public Expenditure Minister Brendan Howlin said the minority stake in the ESB would be sold as an “initial demonstration of intent”.

But he stressed: “The disposal will only be undertaken when market conditions are right and when adequate regulatory structures are in place to protect consumer interests. As ministers have stated since the announcement of this decision, the state will not sell equity in the ESB at a fire sale price.”