From Socialist Voice, March 2005

ESB next in line for part-privatisation

The Minister for Communication, Noel Dempsey, has ruled out the sale of the ESB network but has said that the sale of the power generation plants was under active consideration. He is to invite consultants from throughout the European Union to carry out a study of future energy needs. Their report will provide the political cover necessary in order to push ahead with part-privatisation. The European Union will be used as the cover for taking whatever political flak comes the minister’s and the government’s way.
     The government has learnt one thing from the debacle of the Telecom Éireann privatisation. It turned a profitable public monopoly that had received millions of pounds’ investment from Irish workers and sold it at a knock-down price, turning it into a private monopoly now run by venture capitalists, led by Tony O’Reilly. The Irish public has come to realise that the service has gone down and prices have gone up, as well as profits for this private monopoly. It also learnt another lesson, when the government was interested in introducing broadband as a necessary national infrastructural priority, that Eircom was more interested in profits than national economic priorities.
     To hand over the ESB lock, stock and barrel to a private energy company would prove difficult to sell to the public—considering the fact that the Energy Regulator has stated that the ESB needed to raise its prices in order to allow private electricity generators to enter the market. So a very efficient and profitable publicly owned company is to be split up to suit the ideological masters of neo-liberalism in the European Commission.
     It is interesting that the part of the company that the minister wants to retain in state hands is the part that requires constant investment to maintain and upgrade: the national electricity grid. In winter hardly a week goes by without some district suffering black-outs because of damage to power lines from storms. Clearly, if it was left to the private electricity generation industry, as was shown in the major black-out last year on the American-Canadian border, private companies would put profits far ahead of long-term investment in infrastructure.
     If this plan goes ahead it will result in higher electricity charges, if not immediately (to sweeten the pill) most certainly in the medium and long term, for both industry and the domestic market. Current ESB pricing reflects the broad social-solidarity ethos of the public sector. You pay the same for electricity in Dublin as you do in County Donegal or County Kerry. In future, as international experience has shown, we will find that the large corporations and large consumers will be able to buy electricity at cheaper rates, in effect being subsidised by the domestic consumer. This happens today, but it works, because it is owned by the state. In future we would have different companies that own the generation system vying for the large consumers, and it is ordinary people who would make up the difference.
     At present the ESB owns and runs nineteen power stations throughout the country. It has a very profitable international arm that has won many international contracts, bringing much-needed cash into the ESB itself and thereby directly helping the development of the network at home.
     It makes no economic or political sense to break up the ESB. Electricity generation is a natural monopoly, which has for many decades been a leading industrial innovator, a good and progressive employer. The ESB has developed many world-class technological advances in electricity generation. It has been an important infrastructure provider in rural Ireland. What is being looked at is the privatisation of the most profitable sector, with the area requiring constant investment retained by the state. Neo-liberalism really is the economics of the madhouse.

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