Semi state reforms led to a series of public clashes

MICHAEL Lowry took up his post as Minister for Transport, Energy and Communications promising to shake up the semi state sector…

MICHAEL Lowry took up his post as Minister for Transport, Energy and Communications promising to shake up the semi state sector and usher in a new era of competition and accountability. And he did oversee some major decisions, particularly in the telecommunications sector.

But inevitably the headlines were dominated not by these developments but by a series of clashes with management and boards of some of the companies under his control.

As well as these public wars, Mr Lowry also had difficult relationships in private with the boards and senior management of some of the semi states. He was, after all, the minister who alleged that there were "cosy cartels" operating, which he intended to crack.

When Mr Lowry was appointed to the job in late 1994, he soon made it clear that he saw it as high profile. Within the first few months in office he was talking of the need to make tough decisions in regard to the semi states and saying he was the minister to make them. But by early summer of 1995 he was derailed by the extraordinary events surrounding his handling of CIE.

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The minister dismissed the chairman, Mr Dermot O'Leary, a Fianna Fail supporter, and replaced him with Mr Eamon Walsh. He thus set in train a chain of events which was to lead to a major dispute with the CIE board and ultimately claims by Mr Lowry that he was being spied upon and the "Tuffy affair".

It was only the first in a series of controversies. There followed the dispute about tendering procedures at Bord Gais, the sale of land in Horgan's Quay in Cork by CIE and the Bord na Mona affair, which culminated in the departure of the managing director, Mr Eddie O'Connor.

It is ironic that it was a report on Dr O'Connor's remuneration by Price Waterhouse - the same accountants involved in the Dunnes Stores affair which sparked off the Bord na Mona controversy.

But while the series of Lowry "affairs" made the headlines, the minister was also involved in taking key decisions about the semi state sector. A major restructuring programme at the ESB was pushed through, and Mr Lowry oversaw the part privatisation of Telecom Eireann through the sale of an initial 20 per cent stake to the Dutch/Swedish consortium, KPN/Telia.

Mr Lowry was criticised - with some justification - for delaying this sell off, which turned into something of a slow bicycle race as one bidder after another dropped out. But the blame for this delay must lie as much, if not more, with the previous government.

Mr Lowry's other main decision also lay in the telecommunications field. He oversaw the competition for the sale of the second mobile telephone licence.

Under pressure from Brussels, Mr Lowry put a £15 million cap on the price that could be paid for the licence: most bidders would have paid much more. The race was eventually won by Esat Digifone a consortium of Mr Denis O'Brien's Esat Telecom, the Norwegian state telephone company and Mr Dermot Desmond's investment company IIU, which took a 20 per cent stake.

The decision to award the licence to Esat Digifone led to loud protests from some of the losing contenders. However, none went as far as to seek a judicial review of the process, and Esat Digifone is due to launch early next year.

Quite apart from his public clashes, Mr Lowry had sometimes difficult relationships with senior executives and boards of some of the semi states. Some privately complained about his style and were particularly irked by his ordering a review of tendering processes across the semi states.

Those close to Mr Lowry argued, on the other hand, that some of the semi states badly needed a shake up and disliked the level of interest the minister was showing in their affairs.

Mr Lowry might like his term as minister to be remembered for the big decisions in the telecommunications and energy sectors. But instead what will be recalled are the controversies at CIE and Bord na Mona and the manner of his departure.

Cliff Taylor

Cliff Taylor

Cliff Taylor is an Irish Times writer and Managing Editor