Ireland: Cabinet to discuss State asset sale

Irish Times
08.09.2011
By MARTIN WALL and STEPHEN COLLINS

The Government will today consider proposals to sell some State assets, including a stake in the ESB.

The ESB proposal is one of the main items set out in a memorandum drawn up by Minister for Public Expenditure and Reform Brendan Howlin on the sale of State assets which will be discussed by the Cabinet today.

Under the terms of the EU-IMF deal of last November, which the Government is committed to implementing, there was an agreement to undertake an “independent assessment” of the electricity and gas sectors and to set targets for possible privatisation when the assessment was completed.

Speaking in Dublin this morning, Tánaiste Eamon Gilmore said the Government has committed in the Programme for Government to raise about €2 billion through the sale of State assets. “The Government’s economic management council have been looking at the options that are available for some time, there will be a discussion of that at the Cabinet today and that will be based on the memorandum on public expenditure which the Minister is bringing to the Cabinet,” said Mr Gilmore.

Yesterday the IMF urged the Government to seek to raise €5 billion from the sale of State assets when delivering its quarterly assessment of the Irish economy.

However, this IMF recommendation was not contained in the revised memorandum of understanding, which contains the measures which the Government is obliged to implement. The memorandum is agreed between the Irish authorities and the troika of institutions involved in Ireland’s bailout: the IMF, the European Commission and the European Central Bank.

The figure for asset sales recommended yesterday by the IMF is significantly more than the €2 billion privatisation which is set out in the programme for government.

Taoiseach Enda Kenny yesterday reiterated the commitment to raising €2 billion from the sale of State assets for investment in the New Era job-creation project.

The decision on what State assets to sell will depend on the progress of negotiations between the Government and the EU on whether some of the funds used from the disposal of State assets can be used for job creation rather than simply paying down the national debt.

Informed sources said last night the memorandum drawn up by Mr Howlin sets out a range of options for the Cabinet in disposing of State assets. Minister for Transport Leo Varadkar suggested yesterday that the State could sell its remaining 25 per cent stake in Aer Lingus.

“What you can expect in some cases is a partial privatisation where there will be an equity stake in a State company that could raise a lot of money in the case of the energy companies. With other companies there will be a list at a later date of disposals that can occur.”

It is understood that there are no proposals to sell any of the transport companies in the CIÉ group.

Full article

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