‘Proceeds should fuel job creation’

THE full €3 billion of proceeds from the sale of state assets should go towards job creation, Fianna Fáil has said.

The party insisted that using the funds to pay off debt was not part of the original agreement it reached while in Government when signing up to the EU-IMF and ECB bailout.

“It was never a commitment to use it for a reduction of debt,” said the party’s spokesman on Public Expenditure and Reform, Sean Fleming.

The Government said it had got “concessions” from the troika that a third of the funds raised could be put towards job creation.

An agreement to use the proceeds to service debt is not mentioned in the original Memorandum of Understanding (MoU) with the troika.

However, Minister for Public Expenditure and Reform Brendan Howlin said the troika made it clear to the coalition parties immediately after they came into office that all the proceeds would be used for this purpose.

Mr Fleming said this is simply not true and there was no such agreement.

“The minister has conceded for the first time ever on behalf of the Irish people that two-thirds of the proceeds of the sale of state assets will be used for the reduction of our national debt.”

That has “never been agreed to before now”, he said, adding that it was a “new development” in the bailout agreement.

He said the assets should be looked at “on a case by case basis with a view to reinvesting the entire proceeds for growth and economic development”.

Sinn Féin spokesperson on public expenditure and reform Mary Lou McDonald said citizens were getting a bad deal.

“Selling off parts of successful self-financing commercial state companies is a bad policy decision made by Fine Gael and Labour, despite their best efforts to lay the blame for their decision at the door of the troika,” she said.

Socialist Party TD and former Aer Lingus employee Clare Daly said that, instead of disposing of assets, the Government should be “enhancing the role of the state in job creation through both emergency necessary public works and an expansion of state enterprises”.

Cashing in: The four assets for sale

* BORD GÁIS ENERGY

Bord Gáis has two main businesses — its Energy division and its Networks division. The Energy division is the retail side, supplying gas and electricity to almost one million customers, and will be put up for sale. The Networks division is the infrastructural side covering structures as gas pipelines and sub-sea interconnectors and will not be sold, as the State considers the transmission and distribution systems to be of strategic importance.

* ESB

The Government had initially intended to sell a minority stake in ESB, but has now decided against this, saying it wants to retain the company as a “vertically integrated utility in state ownership”.

However, the Government will sell some of ESB’s “non-strategic” power generation capacity, which means offloading a number of power stations which the coalition believes are not of importance to the State. The list has not yet been specified or agreed. As an example the ESB has a power station share in Spain which could be sold.

* COILLTE

Consideration will be given to the sale of “some” of Coillte’s assets such as trees but not its land, which will remain in State ownership.

* AER LINGUS

The Government is prepared to sell the State’s remaining stake in Aer Lingus “when market conditions are favourable and at an acceptable price”.

A sale to Ryanair has been ruled out, however, because of EU competition laws.

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