Letter to sundry TDs

Dear Deputy,
I am writing to you about proposals to dispose of ESB, and also Aer Lingus. In particular, I would like to argue that any sale of these assets should not include the electricity grid or foreign landing slots in the ownership of these companies.

Firstly, the electricity grid: the current proposal is for the grid to be sold along with ESB, with Eirgrid retaining the contract to run the grid. For 2 reasons this seems a bad idea to me. Firstly, the ownership of the grid should not be in the hands of a private company. The problems this creates in regard to long term investment decisions and the maintenance of competition seem insurmountable. Secondly, and perhaps more importantly, if the grid is sold in this manner, with Eirgrid operating it, we will almost certainly fail to achieve the true value of the grid. What investor, when buying the ESB, will be prepared to pay full price for an electricity grid they cannot even operate? Clearly, to sell the grid bundled with the ESB is to doom us to accept a price below real value. If we are absolutely determined to sell a share of the grid (which I hope is not the case), then we should at least transfer it to Eirgrid first and then sell a minority stake in Eirgrid along with the grid. Noone will be interested in buying the asset without the right to operate it. This is a daft plan.

Secondly, the landing slots owned by Aer Lingus really are the envy of many nations. These slots have been accumulated because the State identified early on the importance of air travel to an island nation with a tourist industry. These considerations remain valid today, and we must safeguard our connections provided by these slots. To me, the slots should never have been sold along with the airline. Rather they should have been retained in a holding company under state control and made available to airlines flying routes into Ireland. I do not have faith in the contractual burdens that the Minister proposes to put on the slots as a reliable safeguard of our flight connections. Rather, before the sell-off of the remainder of Aer Lingus, I would like to see the State embark on a "sale-and-leaseback" arrangement with Aer Lingus to resecure these slots into State ownership. This will be expensive, but the subsequent sale will pay for it and our enviable flight connections will be truly secured. Otherwise, I guarantee you, in a few years some cleverclogs will find a way to sell these slots to the Oil Sheikhs or the Chinese -or some other country with lots of new money and poor flight connections. I know we will regret any sale of these slots. We are relatively overserved with flight connections in comparison to other similar sized countries, and perhaps take this advantage for granted.

Finally, I'd also add that while the private sector does well at managing staff, using fixed assets and addressing costs -it is not good at everything. For instance, the State is far superior to the private sector at capital investment, largely because in normal times it has concessionary lending rates (and presumably we will do sometime again) and also because it has the luxury of looking at long term benefit rather than simple, immediate cashflow problems. Therefore in all state asset disposals, we should aim to dispose as much as possible with those bodies which deal with large numbers of staff, are responsible for delivering services etc., and avoid disposing of assets which are perfectly well run in State ownership and can be used to serve strategic national aims. Legal title to the Grid and ownership of the landing slots are perfect examples of critical national infrastructure which can be leveraged to national ends, can be invested in cheaply by the State and which have small staffing and management requirements. They are better run under public ownership.
sincerely
Ger