Should Ireland sell off its its Ports

dekbhoy

Nicola Cooke in the Business Post today says that private investors from England, the Middle East and China are interested in Ireland's ports and airports. Investment banks in London and further east have quietly asked the Department of Transport about possible purchases. She quotes Minister Varadkar's spokesman on the question:

"The Minister is happy to meet any group or individual who is serious, and has the financial backing and proper proposals to develop the State's ports or airports. So far the interest has not tranpired into anything rock solid."

Cooke says Minister Varakdar has confirmed already that his department is assessing whether the government (I think that should read State) should retain ownership of the ports.


Personally think this is a terrible idea, its the one sector that is aiding or will be responsble for our economic recovery. Dublin Port has paid a dividend to the state the last 5 years running , it has also taken control of the loss making dundalk port to save the government bailing it out.This could definitely be Eircom mk2

Old McGroin

No, Ireland should not sell it's ports or any of it's other assets. If we sell all our assets it would still not raise enough cash to relieve us of our debts, so it would eventually come to a point where we are absolutely bankrupt AND have no assets in the country left to depend on.
No matter what we do, we will not be able to pay back all of the money borrowed so we should ride it out to the enevitable conclusion, tell the lenders and bondholders to p!ss off because we physically cannot pay their way for them anymore and then rebuild our economy with the help of our remaining assets.
It sure beats eventually telling the lenders and bondholders to p!ss off and then trying to rebuild our economy with no state owned assets left.

bnt

If Ireland were to sell assets, that would be to improve the cash flow situation, if that was a problem. Is it a problem at the moment? Not sure.

But selling assets wouldn't (in theory) change the Solvency (bankruptcy) situation. A sale would be simply converting an asset of one type (infrastructure) in to another type (cash), so the line on the balance sheet would not change.

What it would do, however, is put a price on that asset: remember, an asset is worth what someone is willing to pay for it - no more, no less. The accounting term you might hear is "mark to market": by selling (part of) something, you find out what it's worth. That's why we can't clearly state whether Ireland is bankrupt or not, today: there are major assets, like Ireland's ports, that simply do not have prices on them. I don't think the government really wants to find out just what those prices are ... :eek:

norrie rugger

We can just lease the operational rights.
Same with the ESB, Gas, Airports and Commuter services.

Disband all, set up one utilities company to own the networks (state-owned) and lease the networks out. Prevents the disaster that was the Eircom sale, in that the network went out of public hands. Say what you will but things like this need to remain public, so as to have the interests of the state at their core

View

norrie rugger wrote: »

We can just lease the operational rights.
Same with the ESB, Gas, Airports and Commuter services.

The state would get more cold, hard cash by selling the ports - operational rights aren't going to bring in anything like the same cash.

Liam Byrne

The powers-that-be tried this already, with eircom, and we're paying the price since. We're also paying the price of privatised tolls.

Essential infrastructure should be kept within the country, and within that system they should be priced so as to stimulate the wider economy.

Giving a private operator control of our import and export infrastructure is a bad idea.

Dob74

View wrote: »

The state would get more cold, hard cash by selling the ports - operational rights aren't going to bring in anything like the same cash.

Why sell the family silver. We are pouring billions into the banks who are allowing builders to hang onto there housing stock. So why would we sell profitable state companies. Not only are they providing a revenue stream through there dividends but decent paid jobs that also help the economy.

The M50, Eircom, Greencore have all been disasters. The government most own key infastucture assets not the likes of uncle Tony.

norrie rugger

View wrote: »

The state would get more cold, hard cash by selling the ports - operational rights aren't going to bring in anything like the same cash.

Short term thinking.
Keeping ownership allows.for a constant income.stream, with ability to remove a poorly operating compqny.

It also allows for the upgrading , without the need for capex, as upgrading costs can be built into tenders

Nody

norrie rugger wrote: »

Short term thinking.
Keeping ownership allows.for a constant income.stream, with ability to remove a poorly operating compqny.

It also allows for the upgrading , without the need for capex, as upgrading costs can be built into tenders

Most people would argue that the state is as a poor as an operating company can get due to their regular behaviour of buying votes for election day with golden contracts.

norrie rugger

Nody wrote: »

Most people would argue that the state is as a poor as an operating company can get due to their regular behaviour of buying votes for election day with golden contracts.

And who is to blame for accepting these practices? The electorate.
Simple fact is that once sold, we have no say in the matter anymore

Debtocracy

The financial crisis lies in the virtual realm, it’s all to do will accounting and balancing the books. It makes no sense to give up strategic real assets to solve this virtual problem.

On a related point, large debts have been forced upon many second and third world nations in an attempt to gain control of their assets. Looks they finished pillaging these countries and are coming after the developed economies. A few months ago investors they were already having conferences about how to carve up the assets of Greeks. Eventually sovereign states will be left with nothing but worthless fiat currency.

View

Dob74 wrote: »

Why sell the family silver.

Because we are broke - maybe you missed the IMF being in town?

Dob74 wrote: »

So why would we sell profitable state companies.

Cold hard cash - the "family silver" is there to be sold when needed.

Dob74 wrote: »

Not only are they providing a revenue stream through there dividends but decent paid jobs that also help the economy.

And would you say the revenue stream from them is higher or lower than the revenue payments we'll need to make because we are going to borrow the money they'd bring in if sold instead?

beeftotheheels

norrie rugger wrote: »

Short term thinking.
Keeping ownership allows.for a constant income.stream, with ability to remove a poorly operating compqny.

It also allows for the upgrading , without the need for capex, as upgrading costs can be built into tenders

1. We (Ireland and the world) are in a recession which devalues all of our assets.
2. We (Ireland and the world) are in a financial crisis - I know DJ isn't in bear territory yet but every one else is and the Dow should be by tomorrow - so investors are looking for low risk asset classes
3. Infrastructure constitutes such an asset class meaning we could get more for our infrastructure assets than we might do for others. But the key reason why infrastructure constitutes such an asset class is the predicted long term nature of the investment.

So while we may not want infrastructure funds to own our infrastructure we don't necessarily want them to exclude themselves from the auction meaning we have to dispose of long term interests. Ferrovial are unlikely to buy our airports at the moment, Blackstone's maintain that they have $31.4bn of "dry powder", presumably including their infrastructure funds, or at least capable of being persuaded to reinvest in infrastructure assets. I'm not all that convinced that we're in the bargaining position that we could get a good price while making excessive capex demands at the moment.

As they like to say in sovereign debt markets, GDP is vanity, primary surplus is sanity but cash is king.

Tea drinker

Liam Byrne wrote: »

The powers-that-be tried this already, with eircom, and we're paying the price since. We're also paying the price of privatised tolls.

Essential infrastructure should be kept within the country, and within that system they should be priced so as to stimulate the wider economy.

Giving a private operator control of our import and export infrastructure is a bad idea.

agreed, especially the bold part. If we want to control Ireland Inc and manage our competitiveness it's essential we protect infrastructure in the national interest.

I can see it in a few years, pivate operator turning around and saying the port is unsustainable because xyz and state must invest x billion or y will happen. Usual gun to the head extortion after already making $$$$.

meditraitor

Tea drinker wrote: »

I can see it in a few years, pivate operator turning around and saying the port is unsustainable because xyz and state must invest x billion or y will happen. Usual gun to the head extortion after already making $$$$.

This is a sure thing, look at that shower that the government gave free reign with the M50,,,, what were they called

NTR

THE Government did not even know how much it cost to build the controversial M50 toll bridge before it agreed to a €600 million buyout of the operation in 2008, it has emerged.

The Department of Transport secretary general, Tom O’Mahony, has also revealed how the Government was at a loss as to how much the private company behind the project, National Toll Roads (NTR), had originally invested in the operation before agreeing to a deal which would ensure the company received a €1.15 billion return on its investment.





Read more: http://www.irishexaminer.com/home/original-cost-of-m50-toll-bridge-unknown-126869.html#ixzz1Ui9nii50

I cant find the source but I heard it cost them €58m to build, and the return is over a billion.........

sell infrastructure at your peril!!!

Dob74

View wrote: »

Because we are broke - maybe you missed the IMF being in town?



Cold hard cash - the "family silver" is there to be sold when needed.



And would you say the revenue stream from them is higher or lower than the revenue payments we'll need to make because we are going to borrow the money they'd bring in if sold instead?

Broke? We have enough money to bail out incompent bankers who earn top dollar.

Pete_Cavan

I think people should be careful when using phrases like "it pays a dividend" to the state - you have to consider; how does this dividend compare to the cash that would be released from disposing of the asset, is the current level of dividend likely to increase/decrease/remain constant, what is the ROI,what further investments are needed in order to ensure the assets continues to pays a dividend, etc.

In the case of our ports, I would be worried the state would not be able to provide the high level of funding needed improve or even maintain our ports. Our economy is heavily reliant on exports so we need functioning ports. This also means there is likely to be money made from acquiring ports and the land is unlikely to have any value as anything other than a port. The question is; should we hold onto "the family silver" if it is only going to get cracked and broken in our hands or should we cash in and let others restore it?

WRT Dublin Port, IMO only facilities for cruise ships should remain and all other port facilities should be moved to Bremore. Instead of wasting time and money trying to infill 52acres or recalim 100acres (neither of which will happen due to environmental concerns), just move to somewhere else that has the space.

Magic Beans

THE Government did not even know how much it cost to build the controversial M50 toll bridge before it agreed to a €600 million buyout of the operation in 2008, it has emerged.

The Department of Transport secretary general, Tom O’Mahony, has also revealed how the Government was at a loss as to how much the private company behind the project, National Toll Roads (NTR), had originally invested in the operation before agreeing to a deal which would ensure the company received a €1.15 billion return on its investment.

Read more: http://www.irishexaminer.com/home/or...#ixzz1Ui9nii50

Did they not file accounts for any of the years during the building project? Surely a little investigation by the Revenue Commissioners would have yielded a ball-park figure that they could have worked off? Of course the more cycnical among us probably have other suggestions why this didn't happen.

Panrich

We also have many comely maidens.