ESRI REPORT:THE ESB'S generation capacity could be privatised, a new report by the Economic and Social Research Institute suggests.
The report, which is a submission to the group set up by the Government to assess what should be done with State-owned assets, was written by three members of the institute’s staff, but does not represent a formal ESRI view.
The working paper suggests that the sale of some State-owned assets could make the economy more efficient and competitive, but warned that “reform must be conducted sensibly and not [be] derailed by vested interests as has been the case, on occasion, in the past”.
It stresses that many factors need to be considered when deciding on whether State-owned assets should remain in public ownership or be privatised.
The report is critical of employee share ownership plans, such as that created in Eircom before its privatisation, which “are by all accounts unique to Ireland”. The authors go on to say that “it is not entirely clear what the rationale [is] for this transfer of wealth from society at large to a select group of individuals who happen to work for a State-owned firm”.
In July, Minister for Finance Brian Lenihan said he had appointed economist Colm McCarthy, who led the body that recommended €5 billion in public service cuts last year, to chair the new Review Group on State Assets.
It is charged with looking at the possibility of disposing of public-sector assets, including commercial State companies.
According to a preliminary list published by the Department of Finance, the organisations it will cover include all major State companies, such as ESB, Bord Gáis, RTÉ, Iarnród Éireann, Dublin, Cork and Shannon airports, (all owned by the Dublin Airport Authority), 10 port companies and Bord na Móna.
The group, which includes Department of Finance official Donal McNally and TCD’s Prof Alan Matthews, will report at the end of the year.