Fine Gael's €18bn "New Era" plan for Water, Energy & Communications infrastructu

Amtmann

FINE GAEL has claimed its proposed €18 billion investment plan for energy, water and broadband sectors has potential to create over 100,000 new jobs within four years.
Party leader Enda Kenny yesterday launched the New Era document, which the party says will result in radical changes in the way public utility companies and the semi-State sector works.
The key components include a plan to retro-fit the entire housing stock of 1.2 million homes; a commitment to 50 per cent of energy coming from renewable sources by 2020; to have the fastest broadband in Europe, and proposals that would result in 50 per cent of cars being electricity-run by 2025.
The plan proposes the setting up of five new commercial semi-State companies with responsibility for the energy grid, gas supply, water services, broadband, and combined forestry and bio-energy services. The party will also launch a new State holding company, called New Era Ltd, which will manage the other companies.
According to the policy paper, it will be a commercially driven company with a staff of 100 professionals, with a mandate to reorganise the semi-State sector into “more focused” companies.
Mr Kenny said the plan would radically restructure how business is done here. “This is the way we join the dots; how we can transfer that into jobs and growth.”
The party’s energy and communications spokesman Simon Coveney claimed the new policy concentrated on the three areas where Ireland’s economy was most broken. He said it would result in 105,000 jobs.
The plan suggests some major changes including taking water services under one company, Irish Water, rather than having 34 local authorities in control.

http://www.irishtimes.com/newspaper/ireland/2009/1128/1224259620221.html

See attached.

Sponge Bob

No transport thank God, I am sooooo BORED with roads.

bk

The Broadband section seems to be well thought out, obviously some one has been doing their homework and reading the Ireland Off Line forums here on boards.ie. They have picked up almost exactly the plan I've been talking about for years.

The energy section is far more wishy washy, 50% of energy from renewables by 2030. Yeah right.

Son Of A Vidic

Have they also included the Sun, Moon and Stars with these proposals or is that included in the 'Cloud Cuckoo Report'? I'm just naturally wary of all Irish politicians due to their tendency to speak with 'Forked' tongues.
It is difficult to suspend cynicism when it comes to the 'geniuses' in the Dáil.
But here goes - if they can deliver this, big 'if', then fairplay.

Sponge Bob

The Broadband section is well thought out and deliverable . I am slightly sceptical on a few aspects but there is plenty of time to thrash these out .

The mega grid appears to be overkill, we are at the edge of europe not a transit location in central europe and that will still be the case in the year 2030 .

Carawaystick

It's fairly reasonable and much more thought out than transport 21.
however-
combining Eirgrid and esb networks - the staff of the esb own 5% of the esb. the esb own the transmission network. esb networks own the distribution network. removing these from the esb group will necessitate some payment to the esb staff for their 5% of these assets.

Joining Coillte and BnaM will have one semi-state company owning about a fifth of the state. BnaM own about 8% and Coilte own about 11% or so.
It's a lot for an unaccountable organization.

Irish water seems a good plan - but no mention of group schemes. I'd imagine if I was paying for my own water supply I'd be fairly gung ho for water charges, instead of paying for everyone elses water.
I'd also see about supplying non-drinking quality water along side drinking water. If the cost of treating the water is so high, then surely piping mildly filtered/treated water should cut down the costs of flushing drinking water every time you flush the toilet.

Haven't we a semi state bank again after selling ACC & ICC. They've a half built headquarters on the North quay of the Liffey... and a former FG leader on the board already.....

BluntGuy

http://www.independent.ie/national-news/government-to-sell-off-minority-stake-in-esb-2875736.html

But the Coalition is under time pressure from the International Monetary Fund and European Union to indicate how it plans to raise the funds from privatisation agreed in the bailout deal.

Ministers will also have to convince the bailout troika of the value of pumping money back into infrastructure, rather than simply using the proceeds to reduce the budget deficit.

A detailed proposal will be drawn up showing the return to the economy from investing in the infrastructure.

The IMF shifted the goalposts on state asset sales last week, saying it wanted €5bn raised -- more than double the Fine Gael-Labour Party coalition's own target of €2bn.

Progress

The Coalition will have to strike a tough deal with the IMF-EU when the delegation returns in October to review the progress of the bailout.

The task of preparing the ground for the ESB to be privatised will be handed over to the Government's in-house financial experts. The State's money managers, the National Treasury Management Agency (NTMA), will be told to estimate how much can be made from the sell-off of part of the ESB and the best way to handle the sale. The agency will also be asked to assess the value of other assets on a shortlist of potential sales.

The preparatory work needed for privatisations will be handled by New Era, which is starting up as a new unit of the NTMA.

Meanwhile, Energy Minister Pat Rabbitte last night said no home in the country would have their electricity or gas supply disconnected this winter.

But the minister's commitment is based on families in arrears agreeing to a pay plan or having a pay-as-you-go meter installed in their homes.

Mr Rabbitte dismissed the perception that Ireland has the highest electricity prices in Europe. The minister said electricity and gas prices were competitive in this country and compared favourably with prices across Europe.

Will our partners allow us to use pension reserve money for infrastructure investment is another question.

stupid question i know, but is the pension reserve not reserved for future pensions?

LaFlammeRouge

BluntGuy wrote: »

Will our partners allow us to use pension reserve money for infrastructure investment is another question.

Our 10 year bond rate is now down to 7.5%. I think we now have turned the corner :eek:. I think the IMF leash will slacken as our borrowing rates drop.

dynamick

Deleted User wrote: »

stupid question i know, but is the pension reserve not reserved for future pensions?

The pension reserve was changed by law in 2009 to allow the minister for finance to use the reserve to recapitalise banks. In 2010, law was passed to allow the minister to request that any portion of the reserve be sent to him to invest in state capital projects - I don't think this provision has been used yet. There is now 5bn left in the pension reserve which has not been used for bank recapitalisation.

NPRF recap of Irish banks:
2009
AIB: 3.5bn
BoI: 3.5bn
2010
AIB: 3.7bn
2011
AIB: 5bn

Value of bank shares at end 2010: 5.5bn

antoobrien

LaFlammeRouge wrote: »

I think the IMF leash will slacken as our borrowing rates drop.

I hope they don't give us any slack on current spending, still way too high for the amount and types of tax we raise.

dowlingm

The pension reserve was never a pension reserve. It was a piggy bank, and piggy banks are made to be broken.

If it was a pension reserve fund it would have had an independent investment board - the legislative provision allowing "directed investment" made a mockery of any sort of mandate to preserve and grow the funds.

What should have happened was an Ireland Pension Plan (similar to Canada Pension Plan) which covered ALL contributory pensions in the State with an eventual goal that no such pensions would be paid from tax revenue and all PRSI pension components would go to the IPP and investments in the same would be managed by an IPPIB which would have a fully independent mandate including proportion of funds invested abroad.

If Joe Public though his wage contribution was being sent off to foreign bondholders, the breaking of the NPRF would have been politically untenable. Bulk transfers from government don't have the same resonance.

BluntGuy

http://www.rte.ie/news/2011/0929/newera-business.html

The Government has announced the establishment of a new body to manage its shareholdings in semi-state companies. It has also set up a Strategic Investment Fund to invest money from the National Pensions Reserve Fund in the Irish economy.

NewEra will operate under the National Treasury Management Agency and will be headed by Dr Eileen Fitzpatrick, who is currently working with the National Pensions Reserve Fund.

Finance Minister Michael Noonan said NewEra would carry out corporate governance of behalf of the Government as a shareholder. Its remit covers ESB, Bord Gáis, EirGrid, Bord na Móna and Coillte.

It will review companies' investment plans and identify possible synergies between investment programmes of different state companies.

NewEra will advise on and oversee any restructuring of the companies, and will work with Public Expenditure & Reform Minister Brendan Howlin on the sale of assets.

The agency will initially operate under the NTMA, but will bring forward proposals on how to move towards becoming a holding company for the State's shares in commercial semi-states.

Minister Howlin said the Strategic Investment Fund would be a forerunner of a Strategic Investment Bank. He said that, as well as channelling money from the NPRF in important areas of the economy, such as energy and broadband, it would seek matching funds from private investors.

Minister Howlin's department is looking at options for the sale of State assets. He said NewEra would advise him on valuations of these assets and the best way of selling them.

Fine Gael's Fergus O'Dowd will be the Minister of State responsible for NewEra.

'No agreement' on €5 billion sale figure

Minister Howlin said the Government had not taken any decision to sell off state assets other than a minority stake in the integrated ESB.

Asked about suggestions that the Government might sell off state assets worth up to E5 billion, Mr Howlin said there was no such agreement. He said the Government had removed a figure from the last Memorandum of Understanding which now refers to an "ambitious" sale process.

He said ministers had indicated to the IMF/EU/ECB troika that they wanted to move away from the previous agreement that all sale proceeds be used to pay down debt, because they wanted to develop a growth strategy.

The Minister said he firmly believed that the Government would have a "ready ear" from the troika if they could be persuaded that the money would be well spent.

Pete_Cavan

BluntGuy wrote: »

http://www.rte.ie/news/2011/0929/newera-business.html

Minister Howlin said the Government had not taken any decision to sell off state assets other than a minority stake in the integrated ESB.

I really hope NewEra make the government reconsider this. Selling off a minority stake is the wrong way to go about it and is just Labour taking the easy option to appease the unions. Hopefully NewEra will recommend handing over the distribution network to Eirgrd before the sale.