Senator Daly Speaks on the Gas Regulation Bill 2013 Second Stage

I welcome the Minister to the House.  The issue of the sale of Bord Gáis to repay our debts is disturbing when one considers that, depending on who performs the valuation, the asset is worth between €800 million and €1 billion.  As the Minister knows, these figures account for approximately four weeks of borrowing.  It does not seem to be a wise move, particularly given the fact that Bord Gáis contributes more than €121 million to the taxpayer in dividends.  Fine Gael wanted to use the sale of State assets to raise funds.  Its five-point plan claimed that the €7 billion to be raised would create 100,000 new jobs over five years under NewERA.  So far, 3,800 have been created, which is slightly short.

The Labour Party general election manifesto referred to the one Ireland concept of public enterprise, determining that semi-State companies should play a full role in the recovery of the Irish economy.  According to that manifesto, Labour was opposed to the short-termism of privatisation of key State assets such as Coillte and the energy networks, under which classification Bord Gáis falls.

My main concern is that we are selling an asset that is providing a dividend.  While we are not replicating the mistake of selling the infrastructure as we did with the sale of Telecom Éireann, there is no clear determination of how the €1.9 billion debt held by Bord Gáis will be divided between the part that is due to be privatised and the infrastructure, which the State will retain.  Will the State keep all of the debt or will it be divided equally?  If one attaches debt to the part that is to be privatised, the amount gained from the sale will be severely reduced and one must wonder whether it is worth selling in the first place.  All that the public purse will get amounts to one month’s borrowing, approximately €1 billion.  We are selling an asset that will this year produce €121 million in dividends, or more than €1 billion since its founding in the 1970s.

The Government claims that it will not carry out a fire sale.  It has referred to €1.5 billion and €1 billion.  Recently, Davy Stockbrokers suggested that it might only be €800 million.  We are seeking a more effective energy company.  As my colleague opposite, Senator Kelly, knows, Bord Gáis is investing in wind farm energy and other areas.  It has also made investments in the North.  We are concerned by the lack of clarity regarding the price, which is a critical issue, and the employees’ future.  Will employees be transferred to the privatised company under their existing terms and conditions?  We are also concerned about the debt transfer.  On a grander scale, the debt is why the company is being sold in the first place, yet there appears to be no clarity on this issue.  These are our three main objections.  Too much is unclear.  With a bit of clarity, we might be able to further discussions on Committee Stage.

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