Vision of a New Era…or a Bargain Sell-off?

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Vision of a New Era…or a Bargain Sell-off?

Make a careful note, says Graham Archer…and prepare yourself for that day, sometime in the dim and distant future, when your children’s children will tug your trousers and ask: “Grandad…what were you doing when NewEra was formed?”

For the benefit of those whose attention was focused on the art of survival, NewEra is the latest gimmick to hit the headlines – an institution set up to manage Government’s shareholdings in certain semi-state companies.

According to the blurb, its purpose is to carry out corporate governance of behalf of the Government with a remit that covers ESB, Bord Gáis, EirGrid, Bord na Móna and Coillte. It will review investment plans, identify possible synergies, advise on and oversee any restructuring that these companies may require.

In addition, it has set up a Strategic Investment Fund to invest money from the National Pensions Reserve Fund in the Irish economy – an initiative that is described as the forerunner of a Strategic Investment Bank.  (Does anyone out there remember the ICC? Isn’t that what it was established to do…before Government sold it off?)

Ominously, the NewEra announcement tells us that Government will be seeking funds from private investors and looking at options for the sale of State assets in which regard NewEra will be called upon to advise on valuations and the best way of selling them.

As readers might expect, Graham Archer has an opinion or two in relation to this development, starting with the name New Era itself – a spin doctor’s creation, if ever I heard one. When Sir Alexander Fleming invented penicillin, it was the beginning of a new era. When Karl Benz invented the motorcar, it too was the beginning of a new era. So it was when Alexander Graham Bell invented the telephone.

But, to describe something as New Era that simply involves the transfer of someone from the National Pensions Reserve Fund to the National Treasury Management Agency is going a shade too far.

My second gripe concerns the need for NewEra – whatever its shape or form. Is it not the case that amongst the responsibilities vested in the CEOs and Boards of Directors in these state companies is the requirement to carry out corporate governance, review investment plans, identify possible synergies and advise on and oversee any restructuring?

Why must we have the expense of yet another state company to oversee these functions. Surely that is what we pay these high flyers their huge salaries to do? And besides, what skills will a lady (already appointed) from the National Pension Reserve Fund have that are not already available on the boards of these companies? Given that the national pension reserves are being pilfered to pay for the irresponsible activities of banks and ministers, one would think that it would be better to leave the lady where she is.

Another curious dimension to this announcement can be seen in the fact that ESB, Bord Gáis, EirGrid, Bord na Móna and Coillte are the only state companies chosen to feel the warmth of her embrace.

How well are Aer Lingus, Aer Rianta and others being managed that they too do not require corporate governance oversight…or to have their investment plans reviewed? Why not CIE or the VHI or numerous others one could think of? Do they not need the corporate governance skills that the lady from the National Pensions Reserve Fund possesses?

It seems to me that the intention behind NewEra that is carefully concealed behind a veneer of corporate waffle is a plan to sell off all or part of these aforementioned companies – a plan that underlines, once again, how dim-witted Governments and civil servants must be.

Can they not remember Eircom and the problems created as our telecoms provider was sold on from Billy to Jack as its debt got bigger and its reserves dwindled? Have they not seen what happened in Britain after transport companies, energy suppliers and water providers had been privatised? It is surely true that those who ignore history are doomed to repeat it.

From where I’m sitting, it is evident that Government is hell bent on flogging off the five state companies that make up NewEra even though it could be argued that they are the ones that least need to be sold.

I don’t hear the people calling out for privatisation of these organisations. Like Eircom, these companies have been built up with the hard earned backing and support of Irish taxpayers. There is no clamour for them to be sold to men in mohair suites.

On the contrary. Taking Coillte for example, I don’t ever want to take a walk in the woods only to find my passage blocked by some chap in a mohair suit – or any other attire for that matter. That is not what I expect in a so-called free and independent republic that our forefathers toiled to create.

 

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