Govt to use two-thirds of State asset sell-off to repay debts

A €3bn sell-off of state assets has been unveiled by the Government with parts of the ESB and Bord Gais energy divisions topping the privatisation list.

Brendan Howlin, Minister for Public Expenditure and Reform, said that a third of the money raised will go back into the Irish economy and the rest will be used to repay debts.

“When we came into Government, the position was that no money from the disposal of assets could be spent on anything except reducing our debts,” he said.

“I am pleased that following intense engagement, the Troika (the European Commission, the European Central Bank and the International Monetary Fund) has agreed that one-third of the proceeds can be used for reinvestment into our economy.

“This is a substantial change to the Troika’s previous position and will help promote recovery in the economy.”

Mr Howlin said a decision had been made by Government not to proceed with a much-touted sale of a minority stake in the ESB.

The State asset sale includes:

:: Bord Gais – The privatisation of its energy business which protects gas transmission and distribution systems and two gas interconnectors in state ownership.

:: ESB Electric Ireland – The sale of some non-strategic power generation capacity, to be identified.

:: Coillte – Some forests will be offered but the land on which they are planted retained.

:: Aer Lingus – The remaining state-controlled stake in the airline will be sold when conditions are favourable and the stock market price is acceptable to the Government.

Mr Howlin said the Government had consistently negotiated with the bailout chiefs from the Troika on the need to redirect the windfall into job creation.

“We were determined to have a growth and jobs strategy from the very beginning of the negotiations with ECB, the Commission and IMF,” he said.

“My department has been looking at other sources of capital to invest in jobs. We will not only get money from the sale of state assets but other sources to leverage the capital, such as the Strategic Investment Fund.

“When we sell the first billion of the state assets, one-third of that total will be to fund job creation.”

Mr Howlin insisted the Government had not drawn up a time-frame for the sales to be completed.

“There’s no deadline. This is a complicated, difficult process. We’re doing this in a measured and careful way,” he said.

“Nothing will be sold unless it presents good value, fair value for the taxpayer. But what we do want is for our growth strategy to invest in jobs.”