He was accused of selling the family silver, but the offloading of Bord Gáis Energy for €1.125 billion brought 2013 to a satisfactory end for Minister for Energy, Communications and Natural Resources Pat Rabbitte.
The Government, he says, has examined the mistakes of asset disposals past and hopes the consideration given to the energy business sale will not result in a similar outcome to the Telecom Éireann privatisation 15 years ago.
"The lesson was that we were starved for a decade of necessary investment in broadband because of the manner in which [Telecom Éireann] was asset-stripped by selling the entire company, including the networks," Rabbitte said in an interview with The Irish Times.
“In this case we’ve retained the [natural gas] networks in public ownership and what we have got is a new player in the marketplace that is capable of growing and providing competition and the theory is that ought to be good for prices.”
At the beginning of last month, it appeared as if the effort to sell the business had failed, as what was on the table fell short of Government expectations. The pulling of the sale followed, but two weeks later it was announced that a consortium comprising Centrica, Brookfield Renewable Power and iCON Infrastructure had struck a deal.
Most significant
Rabbitte said the offer of an additional €120 million brought the sale over the line and secured one of "the most significant" developments of 2013 for his portfolio.
“I have quotes from financial analysts who said what a botched job the Government made of [the sale], ‘Didn’t they know well it wasn’t worth €1 billion in present market conditions’,” he said.
“Two weeks later the same people have written that we have undervalued it now, having got €1.125 billion. Only politicians are held to account for what they said in the past – financial analysts, never.”
With a consortium willing to pay good money, some have suggested the State would be better off holding on to Bord Gáis Energy rather than selling it.
“There is a lot of naive comment about family silver and all the rest. I don’t see it as losing an asset. I see it as having acquired a significant new player in the Irish market that has industry experience and access to substantial resources,” he says.
The Government and troika agreed on the sale of State assets worth up to €3 billion (with a portion of proceeds going back into the economy), but Rabbitte says it is “exaggerated” to suggest the Coalition has “a huge menu” to choose from.
Likely disposal
"A 25 per cent stake in Aer Lingus, so what?" he said, adding that an ESB holding in a Spanish electrical plant was the most likely disposal in 2014.
Rabbitte said avoiding a Christmas industrial dispute at the ESB was the development in his area that made him happiest last year. Contingency plans were reportedly in place, but Rabbitte says the disruption of an electricity blackout could have had “unthinkable” consequences, given the connection between energy, electronics and employment in the State.
Elsewhere, the Minister said he was confident the State would meet its target of obtaining 40 per cent of its energy from renewables by 2020.
Proposals to upgrade the electricity transmission network, increase the State’s wind energy capacity and develop a means of exporting energy are being resisted by communities concerned about the erection of pylons and turbines.
Asked if he felt energy plans were being met with a “not in my backyard” attitude, Mr Rabbitte replied: “Any kind of big infrastructure is more problematic nowadays and that is why you have to be able to repose confidence in the planning system, that it is rigorous, and that is why communication and consultation [with communities] has to be meaningful.”
He added: “There is an awful lot of misinformation and misunderstanding around and I am somewhat constrained as I cannot go out evangelising as it will be seen to be on behalf of one developer or another. All I can do is put in place the intergovernmental agreement that facilitates [energy exports], ensure the national policy planning framework is appropriate, and to ensure the State agency [EirGrid] charged with the implementation of this infrastructure does its jobs to the highest standards.”
Rabbitte saw Labour fall to a 25-year low in opinion polls in 2013, and the weekend of the party's national conference coincided with headlines suggesting his position, and that of party colleague Ruairí Quinn, in the Cabinet were in doubt, with youth set to replace maturity.
“ It’s just a timely piece of mischief-making,” he said. “I talk to Ruairí regularly and I don’t detect any signs of incipient senility. That’s not an issue that preoccupies either of us – it certainly doesn’t bother me.”
Rabbitte said there was no doubt Labour faced a challenge in May’s local and European elections. “It has almost emerged as some iron rule of politics that the smaller of two parties in government takes a disproportionate hit,” he said.
Popularity fall
Labour's fall in popularity has been attributed to supporters disagreeing with some Government decisions. Having brought the country "back from the brink", Rabbitte hopes the second half of the Coalition's term will see many people back at work before a general election occurs, and Labour's merits are compared to the other options.
“I think I would await the outcome of that before I draw any conclusions about what will happen in elections,” he said.
“I’m one of these people who can’t keep a straight face when Micheál Martin comes on television with his broadcast to tell us what the alternative is. He is the author, or at least a joint author, of the mess we have been plunged into. Sinn Féin are not interested in providing workable solutions. Sinn Féin is committed to the view that the worse things get, the better for Sinn Féin.
“And as regards the hodge- podge of nutty Independents who profess to lecture us, they’re for entertainment, not for political problem-solving.”
