Policy on Semi-State companies - Interview
16 Jun 2002
Ireland: Begg calls for semi-state firms policy
Tom McEnaney, Irish Business Editor
THE government must outline its policy on the future ownership of semi-state companies ahead of negotiations on a new social partnership agreement, according to the Irish Congress of Trade Unions.
David Begg, the general secretary, said he is sceptical of what he describes as "ideological" plans for mass privatisation of Irish semi-state companies.
Begg called on the government to clarify its strategy on privatisation. "I would be unwilling to accept that they (semi-state companies) should be dismantled for ideological reasons. So whoever wants to change the ownership status has got to put forward a convincing argument as to why that is necessary and not merely to contrive that by lack of investment," he said.
"What I wouldn't be happy to do is to go into another agreement on a completely vague basis and, during the course of that agreement, have a number of companies sold off in circumstances where we didn't know this was going to happen. Everybody has to know what the picture is."
Begg is advocating talks on a new social-partnership agreement with the government, against resistance from some employers and economists. His comments on privatisation are in part directed at the Progressive Democrats' stated policy favouring the aggressive sell-off of key semi-state companies including ESB, Aer Lingus and Aer Rianta. The new government's policy on the future ownership of those companies has yet to be clarified.
Begg said: "The programme for government is quite vague on all of that, so quite where we stand I'm not sure. It seems to me that given that this was a major issue for the PDs on the election campaign it may well have been diluted or expunged completely from the programme for government."
According to Begg, there may be cases where privatisation leads to a less efficient and therefore less desirable market. "For example, you could say what exactly is the point in having a huge apparatus of regulation and competition for electricity provision in a market of only 3.5m people. It is not as if there are stunning successes elsewhere."
Begg, a former general secretary of the ESB officers association, said: "On the whole the ESB has been quite good at making the forward investment, which allowed us as a country to expand and have supply which matched demand. The difficulty is that if ESB went into private ownership there would be quite a risk the investment wouldn't happen given the long lead-in time that's necessary for construction of plant for electricity purposes. Obviously privatisation has been a complete failure in the telecommunications area."
Begg later became general secretary of the Communications Workers' Union, which represented most of the employees in Telecom Eireann. While securing an attractive deal for his members, Begg was instrumental in the partial privatisation of Telecom Eireann when it sold off a 35% stake to KPN, the Dutch company, and Telia, the Swedish company.
Begg said: "We have the very interesting situation in telecommunications where we've gone full circle from having a publicly-owned monopoly to a company which is privately owned and may become a private monopoly given that Esat's future in this country is very doubtful.
"I think the staff of Eircom did extremely well but it was a bad deal for the country. I have to take responsibility in that I was looking after the staff. The congress position up to now is that these are matters for each company individually. Now I've come to realise that that is incorrect, that there are a lot more issues at stake than just the workers in each of these companies."
