Gas Regulation Bill 2013: Committee and Remaining Stages

Mark Daly (Fianna Fail)
I move amendment No. 18:

In page 16, after line 33, to insert the following:”(2) Any disposal by BGÉ of its shares in an energy company shall not result in an increase of the ratio of net debt to shareholder’s equity of BGÉ.”.

This amendment relates to the issues of debt and the disposal of shares. I understand the Minister dealt with the same matter in the Dáil, but I am interested to hear the Minister’s view on it. 

Pat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)

The Senator has raised an important point in this amendment. The bottom line, however, is that in order to deliver on our troika commitments, to which I referred earlier, and, more important, in order to fund our programme for jobs and economic recovery, we must proceed with the sale of Bord Gáis’s energy business. I cannot, therefore, accept an amendment which seeks to delete the provision that empowers Bord Gáis to dispose of its energy business subject to ministerial consent.

The Government is committed to retaining the gas network business in State ownership as critical national infrastructure. In doing so, it is incumbent on us to ensure this important business remains well funded and with an investment grade credit rating so that it can continue to invest and to provide dividends to the State as shareholder. The Government, therefore, will ensure there is an appropriate gearing level in Bord Gáis’s networks business following the sale of the energy business. This is not, however, a matter that is amenable to provision in primary legislation. To do so, while possibly well intentioned, could result in a situation whereby borrowings to fund necessary infrastructure investment are precluded. That would not assist the company, nor would it deliver security or value to energy consumers and citizens.

While I am not in a position to accept the amendment, I assure the Senator that this matter will be kept firmly under review by me and my colleague, the Minister for Public Expenditure and Reform, on the advice of our officials and the NewERA shareholder executive.

Amendment, by leave, withdrawn.

Jillian van Turnhout (Independent)

Amendment No. 19 in the name of Senator Mark Daly is ruled out of order as it involves a potential charge on the Exchequer.

Amendment No. 19 not moved.

Mark Daly (Fianna Fail)

I move amendment No. 20:

In page 16, after line 33, to insert the following:”(2) BGÉ shall not dispose of the assets of Irish Water.”.

This amendment relates to the broader issue of the disposal of State assets, which we discussed on Second Stage. Our concern is that, in some cases, we are selling assets which account for only one month’s borrowing. As Senator Ó Clochartaigh pointed out, where an asset is making a profit, it does not seem wise to sell it. This amendment seeks to prevent the sale of Irish Water. If it is accepted, any proposal for such a sale would require amending legislation and, thus, the approval of the House, rather than being within the remit of the Government alone. Trevor Ó Clochartaigh (Sinn Fein)

I support the amendment and expect the Minister to do the same in the earlier intervention whereby he stated categorically that he is not in the business of selling off Uisce Éireann. This amendment would copperfasten the position that Bord Gáis Éireann cannot dispose of the assets of Irish Water and they will be kept in State ownership. Will the Minister clarify the Government’s stance in this regard?

Pat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)

I can only repeat the categoric assurance I have already given. We are not setting up a commercial State company to run water services on the basis that we are going to privatise them. Similar to the gas networks, our water assets are critical national infrastructure. Irish Water has therefore been established as a fully State-owned subsidiary of Bord Gáis Éireann and there is no intention, now or in the future, to dispose of it or its assets.

As Senators are aware, my colleague, the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, will bring a new water services Bill before the Oireachtas in the coming months. I understand an outline of the draft scheme of that Bill has been published on his Department’s website. I am advised that the matter raised in the Senator’s proposed amendment would be more properly addressed in this forthcoming water services legislation. On that basis, I cannot accept the amendment.

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