Selling state assets - Utilities must not be privatised

AS anyone who has tried to sell a house or a business recently will confirm, you need to be very lucky or very patient to realise the price you expect for your property.

Of course you may have to accept an offer you would not have taken seriously two years ago because circumstances demand you realise your assets.

Though the State is perilously close to bankruptcy it should not paint itself into this corner and dispose of hugely important national assets, built up over many generations, to try to resolve the great difficulties facing today’s generations.

In any event, semi-state companies that might be attractive to investors would only realise a fraction of their real or potential value in today’s circumstances.

If pension fund deficits are factored in – €2.2 billion at the ESB and €550 million at CIE – they might be even less attractive. If pension obligations were to revert to the State it would make any fire-sale even less attractive. Once again profit would be privatised and losses nationalised. All in all, it is hard to imagine circumstances where Ireland would not lose out dramatically. And, put more simply, if there is a profit to be made by these companies, why should the State not realise it on behalf of all of us?

The philosophical and social argument for privatisation of essential utilities has been lost for decades to come because of the havoc wreaked by unfettered markets indifferent to the idea of social responsibility.

This argument was highlighted by Energy Minister Eamon Ryan yesterday when he spoke strongly against privatisation of corner-stone semi-state companies. Mr Ryan was speaking in the context of a Government-sponsored study on selling off State assets.

How much more inspiring, how much more appropriate it would be if we had a study aimed at identifying ways of improving these entities and the services they provide. How much more uplifting it would be if we had a study on how the State might amalgamate its two energy companies – the ESB and Bord Gáis – which compete vigorously.

Mr Ryan focussed on energy providers and plans for renewable energy, recognising that we cannot remain as dependent as we are on imported energy. Ending, or at least reducing, this dangerous dependence is not a challenge the market will take on, it is the business of the Sate and must remain so.

One of the strongest arguments for privatisation is that semi-State companies are sometimes less than streamlined, that they are run by unions and charge too much for their services. This is too often true but should be seen as a challenge rather than a reason to sell the family silver. Maybe it is time for a Croke Park deal for semi-state companies.

Some semi-states have become too independent and may have forgotten that they are tools of the State that exist to realise industrial or social aims. They must be reminded of this purpose and its implications

Nevertheless, Mr Ryan is right, they should not be sold off in a distressed auction. They played a central role in building this country and can play a huge role in rebuilding it. Even if some must rebuild themselves first.