Bord Gáis retention ‘will not hit budget’

A decision to refrain from selling the retail arm of Bord Gáis will not affect budget plans for 2014, which will instead be supplemented by the sale of assets belonging to the ESB, the Department of Finance has said.

Energy Minister Pat Rabbitte yesterday said the sale of the energy unit of Bord Gáis will be put on hold as the bids received were not good enough.

Up to €110m is pencilled into budget spending measures next year through the specific sale of state assets.

Mr Rabbitte had originally said that the Bord Gáis sale would be completed by the end of the year.

The Department of Finance last night stressed the decision to withdraw the sale would have no impact on the 2014 budget plans.

A European Commission spokesman also said the decision did not affect Ireland’s bailout programme and its deal to pay back money borrowed from EU partners.

“The memorandum of understanding does not specify the sale of any particular asset,” said the spokesman. “Such decisions are entirely within the remit of the Irish government.”

Bord Gáis Energy looks after billing, appliance services, and marketing among areas with more than 900,000 gas and electricity customers.

Earlier, Mr Rabbitte told the Dáil that none of the final bids received for the energy business were at an acceptable value.

Mr Rabbitte added that the Government had been clear that assets would only be sold if a “sale price was achieved which fully recognises the inherent value of the business”.

He also said now was not a good time to sell the energy and power markets.

It is thought that the Government wanted at least €1.5bn for the energy unit, but that international bidders were only offering around €1bn.

Workers’ representatives yesterday welcomed the decision not to proceed with the Bord Gáis sale.

Technical Engineering and Electrical Union acting general secretary Arthur Hall told RTÉ that the asking price for the asset was “selling the company on the cheap”.

A Department of Finance spokesman said €110m was factored into next year’s budget as a “stimulus package” for the economy. This was to come from the sale of State assets. As no figure would now come from the Bord Gáis unit sale, the ‘stimulus package’ would be supported by the sale of ESB assets, said the spokesman, without revealing more specifics.

ESB is selling two turf-burning power stations in the midlands. It is also in the process of selling off a plant in Britain and assets in north Spain.

Fianna Fáil yesterday welcomed the decision not to sell the Bord Gáis assets. Public Expenditure spokes- man Sean Fleming said: “Bord Gáis is an efficient, well-run, valuable State asset and we believe it should remain in State ownership.”