Submission to An Bord Strip

We made a submission to the Review Group on State Assets and Liabilities.

We argue for privatisation of everything that is not a natural monopoly, but not without proper regulation first. We also say that the government should stop giving away intangible assets. We cast the net a bit wider than the interim mandate of An Bord Strip.

55 replies on “Submission to An Bord Strip”

Before this gets out of hand, I ask that you get rid of the McCarthyism tag.

Without knowing anything of Colm McCarthy’s political views, there is a world of difference between the connotation that McCarthyism evokes for some people familiar with US political culture of the 1950s and an economist who makes reasoned arguments – often pithily – that government here should live within its means, in addition to offering other insight on matters economic – all usually based on evidence that can be countervailed, if one wants to.

That tag risks generating more heat than light and does nothing to enhance the kind of discussion that, IMO, the site was founded to promote.
Yes, sometimes here discussion does fall into the kind of “reds-under&in-the-beds” innuendo that marked Senator Joe McCathy’s demagogery.

It is too clever by half to conflate the two. As the Mnister for Finance might say, using his best lawyerly speak , resile from the tag you have applied to this posting.

What complete and utter tosh – how could anybody believe such banal functionaries anymore – the attempted psychology of the calm steady hand is childish in the extreme.
This is now a zero sum game and it is just a question of who gets to eat the pies.
Remember the states policey is now to incorporate debts and sell assets – how sad to see such malice withen entire sections of the body politic.
These petty cardinals cannot even invoke the name of God to justify their actions.
They have all the moral authority of a priest who likes small boys.

Perhaps the authors should have a look at:
http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=10108

I notice that nearly all the discussion and references to public transport in the paper are concerned with Dublin or inter-urban transport – both sectors where it is possible to make a profit. What about the public good that is rural and suburban public transportation (where it exists at all)? Do the authors think that private enterprises will be queuing up to compete in or for such markets?

Profitability is not and should be used as the sole indicator of the success or otherwise of public transport. It might be a truism, but the goal of public services is to serve the public and not the shareholder (even if it is the government) or the employees.

Is it possible to name a successful national transportation network that is privatised? The best and most comprehensive ones in the world (e.g. Switzerland) are publicly owned. Why is this?

I am no trade unionist but the solution to our inadequate public transport is not privatisation. That is simply the lazy way out. A far better approach would be to tackle the unions and the sclerosis at the heart of the CIE.

@Richard Tol

“…in both cases what is on offer is a more efficient and competitive economy if reform is conducted sensibly and is not derailed by vested interests as has been the case, on occasion, in the past. In terms of intangible assets such as permits of various kinds such a those relating to carbon, wind turbine and oil exploration as well as radio spectrum licences, the conclusion is much more straightforward: these assets should be auctioned off to the highest bidder, but using a carefully designed auction which needs to take into account the competitive situation amongst the bidders not only to prevent collusion and gaming, but also to encourage entry and competition. Another important reason to auction these assets is that there is a danger, absent auctioning, that government will be unaware that these are valuable assets and hence not properly price them when making public policy decisions.”

On intangible assets that neither government nor neo-classical economists understand … methinks that an argument that ‘these be auctioned’ is the optimum strategy at the moment is open to some further debate. …. more later …. look at present state of Eircom, abysmal broadband, More-E-are-eye-Teeth tribunal on a previous auction ………

@RT

This assumes that the amount the government would charge private companies in profitable sectors, minus the subsidy for unprofitable sectors would be more than the amount that the government could make if it ran the whole network. This in turn assumes that the marginal costs for a private company running an isolated bus network in the west of Ireland are the same or less than that of the government.

Also, what would prevent private companies taking the subsidy and then running a shoddy service? Monitoring would be expensive is such a case.

Are there any examples of where your suggestion has been successfully implemented?

I’m curious what particular expertise the authors have regarding privatisations? I mean we are talking about over 20 firms, each would have to be examined in detail. I’ve scanned it and the paper does not seem very evidence based, but more theoretical. I’ll read it in more detail.

An a positive note I pleased that the word ‘state’ correctly uses a lower case ‘s’. It annoys me when The Irish Times always spells it State, when the context does not require it.

Dublin Bus and Bus Eireann are commercial companies with wholly commercial mandates. They do not undertake charity work. They are paid, under contract for all the services they provide.

EC directive 1370/2007 governs the subsidies given to public transport companies, in particular bus services. It requires that these services are provided under a public service contract. This means that the company which provides them should be run on a commercial basis and that the transport authority should pay the difference between the cost of providing the service (including a fair profit) and the revenues collected.

After a certain date there is to be a competitive tendering process for bus services in any case. Routes which did not preexist the Act are required to be tendered competitively under the Dublin Transport Authority Act 2008 (section 48 and 52). However in practice this has not been done, for example in relation to the wholly new 63 bus route in South Dublin.

In terms of spectrum auctions, there are two things not clear from your submission. 1. Is this perpetual licences you think should be auctioned, or do you think the auctioned licences should be short, i.e., less than 20 years? 2. Do you think the government should create artificial scarcity in order to increase the value of the spectrum, i.e., if only four companies are interested in 3G licences, then only auction three licences and keep some spectrum fallow?

You will all be excited to know that I, too, made a submission to the above-mentioned committee. In summary, I would say that my emphasis in dealing with state assets would be in terms of stewardship of assets and developing them, rather than in terms of ownership and extracting a return.

As the case of Irish Rail demonstrates, state ownership is no guarantee of good stewardship. Even if we were to elect Fidel Castro as Taoiseach and put privatization out of our minds, we would still have the very serious and difficult task of finding a way to properly steward our national assets going forward. The system we have at the moment is failing in many cases.

If finding good stewards is the starting-point and you can come up with a good model for it, there is no reason why things that are screwed down (i.e., natural monopoly assets), as well as things that aren’t screwed down (i.e, non-monopolies) can be sold, if the conditions and the steward are right. The benefit of doing this is to free up capital to pay down national debt and start up new projects.

@ R Tol

Would there be serious handbags over the pension funds of each of these state assets?
There would be costs that would have to be recognised too….

Did any research go into this document? It just reads like a banal theoretical defence of the market.

I’m all in favour of privatisation in sectors where we can be assured that adverse consequences can be contained.

Here’s my rundown if I was made omnipotent dictator in the morning.

The busses seem to be a manifest case of unnecessary State involvement. Actually the NTA was accepting submissions (sadly, consultation closed yesterday) on bus licencing, in which I voiced a desire to see PSO contracts divided down into multiple contracts, covering a single route or raft of routes (i.e. at a size which other market participants could plausibly compete). These PSO routes then to be awarded in an open competition. Of course there are other unfair advantages of CIE, including the extensive network of stops, depots and stations -these should also be decoupled and shared equally.

I’d also agree about Aer Lingus, with two provisos:
1. we must be able to ensure the maintenance of competition in and out of Dublin
2. We must secure the foreign landing slots which are vital national assets. IMO they should never have been sold. Preferably this would happen through a sale and leaseback agreement between the State and Aer Lingus.

Is it not possible for local authorities to outsource road maintenance? This is an area of rank ineffectiveness nationwide. Indeed, Local authorities are among the worst offenders against common sense in every area under their responsibility. I have a general bias against leaving anything to Local Authorities.

I’d like to see a semi-State established for the purpose of providing water and handling sewage. While this is against the general current of this thread, it would have to be more effective and efficient than the myriad of local authority (in reality sub-local) schemes.

Bord na Mona is one of my favourite State companies, but I’m afraid it no longer fits with our national priorities and could be phased out.

I don’t see that there’s anything impossible about releasing ESB from State control. The State has been preparing for this for a number of years and we are reasonably well fixed to privatise (with some last minute changes). It could be broken up prior to privatisation for competitive impact.

Iarnroid Eireann is a funny one. I can’t see any realistic way to privatise it in the near future. I fell sure it could work cheaper, but cannot see a good way to private ownership.

There are a number of State boards (political kudos attached) for horseracing, dogracing etc. One might wonder why they are part of the public sector. They obviously have merit, but could carry on their existence outside of the State -perhaps with better procedures for appointing their members.

The VHI is already on a path to privatisation. Not before time. The special status of this insurer as a public sector company has been distorting the health insurance market for years. Some of the people baying for sean quinn’s blood would do well to consider the unfair competition he faced all along.

An Post is being part liberalised, but I think it’s too important to be let go entirely. In particular, the maintenance of branches in rural areas and the maintenance of a reliable postal system are vital state interests. In many parts of Ireland, the Post office is the only institution other than the Church and the GAA. It is vital for the State to maintain a presence on the ground and the Post Office is a key part of this.

Finally, I think that only leaves the airports. DAA must be the most overblown institution of the State. It was with horror that I witnessed Minister Dempsey skip a tendering process in order to award the control of T2 to DAA. Perhaps privatisation is not a good idea, but heavy reform is needed at a minimum. Shannon and Cork Airports do not obviously belong in State control.

@Richard,

Looks like an excellent survey of the issues. With 26 semi-states and some intangible state-owned assets already on the agenda for the State Asset Review Group (SARG) – not to mention your and your collegues belief (which I share) that its remit should be extended further – it is obviously difficult in a short working paper to drill down into some of the key areas, but I suspect the SARG might have appreciated more detailed guidance and recommendations than has been offered. Still, if they kick-off from here they won’t go far wrong.

Just one query. “The electricity and gas transmission and distribution networks are natural monopoly and there are arguably grounds for these remaining in public ownership.” (p8)

Apart from arm-waving about strategic assets, family silver and security of supply I have never encountered a plausible argument in favour of public ownership of these networks. In OECD economies public ownership is rapidly becoming the exception rather than the norm – and where it was the norm the share of public ownership is being reduced. I’m sure you’re not saying every one else is mad except Ireland – current experience might suggest the reverse! Do you and you fellow authors have arguments to support your contention?

@Paul
The transmission and distribution network are a natural monopoly. You could privatize and regulate it, but there is no obvious advantage to that. It is better to focus political capital on areas where privatization would bring real advantages.

By Post Author

@Richard,

“..no obvious advantage..”

Have you not considered the likely disposal value of these network assets and the impact it would have on the state balance sheet in these straitened times? Or the fact that efficient financing of these networks could reduce allowed network revenues by up to €300 million a year – a deadweight loss which is being borne ultimately by consumers and the economy? Or the fact that it would prove difficult for Ministers to impose additional unnecessary costs on these networks – again borne by consumers – to promote their pet policies?

Privatising these networks would have the single largest beneficial impact within the SARG’s ToR.

How often do we react – whilst scarce considering the unintended consequences?

Some of the listed entities: water, rail, regional bus, gas and electricity transmission networks are strategic, national entities. So no Neo-con would advocate they be in ‘private hands’ – they might be poorly maintenance, and eventually the state would have to ‘bail-out’ the private interests. Been here before folks! Regulating those ‘private entities’ works until they file for bankrupcy.

The Market: What are ye talking about? All we observe and experience are greedy, self-interested individuals, demanding subsidies, taxbreaks etc. There is NO Market: its a complete intellectual scam as far as I can ascertain. There are mini-Markets which do appear to function efficently, but these are sectoral and local.

Keep the transmission networks and bin the remainder – unconditionally! Now see who wants them!

Brian P

@Paul
No. Politicians are messing with generation and retail; the regulations for connection wind turbines to the grid are silly; and ESB and BGE cross-subsidize capital. None of this is a reason for privatization.

By Post Author

Comments being read with untypical attention. While the formal deadline has passed, anyone who would like to make a submission can do so for another week or two.

David O’Donnell: Moriarty is not inquiring into ‘…a previous auction’. It is inquiring into a previous beauty contest.

@Richard,

I agree that these, on their own, do not provide reasons for privatisation, but do you seriously believe that anything short of the regime change and discipline that privatisation would impose will compel government to address these problems?

And you have avoided consideration of the beneficial impact of converting the equity related to these businesses sitting on the asset side of the state balance sheet into hard cash – and the removal of the contingent liability that their borrowings place on the liabilities side of the balance sheet. Are these not material – particularly in the context of the first item in the SARG’s ToR?

Not to mention the large body of international evidence and experience on network privatisation and unbundled ownership – which highlights both the benefits and the pitfalls to be avoided. Is Ireland so special that none of this is relevant?

@Paul
All that is relevant. We argue for radical reform along one dimension, you argue for radical reform along another dimension. Colm and co are smart enough to discuss both proposals fairly, and wise enough to steer the recommendations towards to the politically less unviable.

By Post Author

@Brian Woods.

Whole heartedly agree, strategic assets should be protected.

Also, funnily enough, with all the talk of sales and discussion of same, there is little mention of the National Spatial Strategy. While I know that McCreevy attempted a partial castration of this with De-Centralisation, surely any long term plan being developed needs to take this into account, rather than simply focusing on solely balance sheets?
Or am I being silly?

But that would assume sane, balanced thinking and so I wont be holding my breath!

@Colm Mccarthy
The mechanism as been activated and the wheels are turning – why do you ask the cogs and bolts for advice ?
Carry on and do your masters bidding – we will either break under the strain or buckle under.
It will be a interesting experiment.

The predictable banality of neolibs in chorus.

You’ll know you’ve got what you want when life expectancy falls by 10 years. Or are you going for the full Russian?

@Richard,

I agree with the two dimensions: (1) a movement from full state ownership thorugh various combinations to full private sector ownership and (2) restructuring from full vertical integration with various combinations of regulation and competition to full retail competition. It’s an illustrative device I encountered many moons ago, but haven’t used in anger for some time as the rest of the world has moved on quite a bit.

And I have no reservations about the ability of ‘Colm & Co’ to arrive at a sensible set of co-ordinates from both dimensions in relation to the various sectors and activities under consideration.

What does worry me is that the uninformed and partisan will extract the conclusion “ESRI says electricity and gas networks should remain in public ownership” without understanding that the paper is examining restructuring only in the context of an efficient mix of competition and regulation.

It may be politic for the ESRI to tackle the issues in this way, but it risks foreclosing the debate. And its makes it easier for those who are isntinctively and unthinkingly opposed to any consideration of privatisation to categorise those of us wish to have a sensible debate on the basis of the evidence as swivel-eyed Neocons.

@ Highway61: “…surely any long term plan being developed needs to take this into account, rather than simply focusing on solely balance sheets?”

Decision makers focus on the ‘balance sheets’ ’cause its their Status Quo reference point. Sad, but true. Makes for some horrifically bad decisions. You know, the successful failures!

“Or am I being silly?”

Def not. Pols have the attention span of a flea. Next polling day! Need to keep the local constituents happy, and all.

@ Pope Epopt: Read (past tense) “Fall of a Titan”. Igor Gouzenko.? Might be difficult to source. Harrowing tale of individual, societal and state betrayel during Stalin’s purges. Devoid of ideological claptrap.

Brian P

look at present state of Eircom

Look at the present state of BT. Possibly the Thatcherite privatise-and-regulate model for utilities hasn’t lived up to all the hopes that were placed on it, but as the history of BT illustrates, it produces (at least) perfectly acceptable results if you regulate competently. Of course competent regulation can’t be guaranteed in this country, but for much the same reason competent control of semi-states can’t be guaranteed either. Remember that it was the state-owned Eircom (and Minister Harney) which introduced metered local calls at exactly the moment that dial-up internet was starting to take off, a greatly underappreciated gem of ruinous public decision-making in this country.

There seems to be a new model for job creation for useless but connected people. Privatize and regulate….

So the actual work will be done by employees or subbies on worse conditions than before…. while the new overlords, the regulators swan about overpaid and unaccountable, adding cost and complexity and destroying the cost base of whatever industry they apply their theory to.

Almost always, the individual regulators are the problem. Not the framework, not the policy… the person.

The mantra these days is to have more and better regulation. It sounds wonderful in theory but I wish there was a regulator for economists. So they could see just how thick, corrupt and dangerous a typical regulator is.

Those who can, do.
Those who no longer can, manage.
Those who never could, teach.
Those who can’t teach but are well connected, regulate.

Those who call for more and better regulators are stupid. Well meaning, same as the early commies, well meaning but displaying no knowledge of human nature. What attracts people to certain positions and how such positions are filled.
They seem a believe the industry will be graced with regulators who are wise, brave, honest, capable, farseeing, practical, sensible and immune to flattery, favouritism, bribes and cosy arrangements. People who could do the real work better than anyone else but whose innate talent and goodness means they can best serve their fellow man by regulating.

If it were so, I would be all in favour of it but the evidence shows were far more likely to get more Paddy Nearys.

I have a proposal relating to intangible State assets. It is mostly a serious proposal. Maybe I will even write it up more seriously and submit it!

The State should place at auction a long-term approval to build and operate a large nuclear power facility serving both this country and the UK export market via the interconnector. Clean, modern, efficient, safe, zero-carbon, baseload nuclear power! I’m sure the Greens will love it. Unfortunately the UK’s current energy minister, Chris Huhne, does not love nuclear power. He loves only wind power, and as a result the UK’s looming electricity supply shortage is likely to blossom into a bit of a crisis over the next several years. Accordingly, the State should make an assay to determine the maximum amount of UK generating capacity that nuclear plant in this country could profitably grab for itself under various scenarios for UK power supply in the next decade-plus. And also estimate the market in this country, of course. The license issued by the state should be for the highest-output possible facility that is reasonably sure of profitability over its lifecycle.

(Speed of execution is important. As soon as it becomes known that we’ve decided to prepare for the auction, the British nuclear industry will use the news to break through the logjam holding their own projects in limbo. Since their projects are already pretty detailed and ready to go, we’ll have to be fast to get to final approval and lock up that UK capacity for ourselves before they do the same to us.)

This project will have numerous side benefits. Cheap (and carbonically-correct) electricity: enough said. Nuclear plants employ a decent cadre of technically skilled and educated people. There’s even a few years of good work for builders during the construction. As a foothold for heavy industry in this country, it might just open the door to other things. The whole experience will be catnip for nationalists. More, the shadow of Chernobyl will do a power of good for Irish political culture. At every election for a national office, the voters will know that they are electing people who have ultimate responsibility for a gigantic nuclear plant on their doorsteps. Even the traditional recourse of emigrating to Britain won’t entirely save them if they get it wrong. This will curb their eagerness to vote for allegedly-lovable chancers and beaming mascots. The knock-on effects on Irish institutional culture should extend beyond industrial safety. Even the Defence Forces will have to shape up a bit. (Though of course it’s in fact very hard to create a proper disaster with modern nuclear technology. Possibly the IFSC is more dangerous.)

The winning contractor will be required to give the facility the name indicated by the State; this will be Atomkraft 9.

For telecom infrastructure proper regulation really is the key to providing good services. The UK’s Ofcom are generally out ahead of the curve e.g. this proposal to the EU. You need a regulator that has both a really good understanding of all the technical issues (e.g. migration from copper to FTTC and FTTH) and the necessary strength to take on existing interests in order to impose a suitable wholesale/retail model to drive competition (think Matthew Elderfield rather than Patrick Neary). I’m not up to date on what ComReg are up to, but last time I looked they seemed very weak.

Ireland is not and never will be a leader in innovation in telecom/future Internet infrastructure – this is driven by the leading network operators and infrastructure vendors and Ireland has no presence there. It would also be unrealistic to expect ComReg to be on the leading-edge of regulation. However one of the rules in the ‘smart economy’ game is to figure out where to efficiently add-value, and not to try and reinvent the wheel. In this case Ireland should not attempt to be a leader, but instead to be a fast-follower. By piggybacking off the work of Ofcom and other leading-edge regulators (e.g. S. Korea) it is possible to take ‘best in class’ approaches and adapt them for national circumstances. From a technical point of view it isn’t really that hard – but you need the political will to make it happen, and also the necessary technical knowledge to overcome all the arguments that will be thrown back at you by incumbents with turf to protect.

Also I think regulators should be subject to the same targets and incentives and punishments as anyone else would be in private enterprise (e.g. get 10M broadband service available to 80% of homes at price point of €20 by 2014, or whatever) and make a large percentage of compensation dependent on meeting the target. You would be amazed at what can happen when people are suitably motivated, and in the business world the number one motivating tool is money. Ireland is so small that explicit schemes need to be put in place to overcome the natural tendency to generate a cozy working relationship with the entities you are supposed to regulate, because you want an easy life and went to college/play golf with those you are now regulating.

@anonym

wouldn’t mind a nuclear reactor meself at the mo – I believe President Sarkozy promised one to John Hayes during the Limerick lock-out … and of course, Minister Lagarde trusts Ireland. Deal is certainly possible here.

@Colm McCarthy

Point on ‘beauty contest’ noted: the serfs have had enough of this well-heeled deadweight – nor do they have any faith, based on such experience, that the upper-echelon originators of the present ‘gift to the masses’ will ever be held ‘accountable’ in any meaningful sense. Department of Justice, in present context, is a tautology.

I note the intangible assets listed in the tor – before even thinking about auction or not, worth looking at the underlying intangible dynamics and the various institutional linkages. Lessons from eircom … and dropping out of the top-50.

@ anonym

I don’t see why the greens should be against it, it’s one of the greenest and safest approaches we could take, not to mention the fact that it suits the layout of our national grid a hell of a lot better than loads and loads of 6 MW wind farms in areas of the country with terrible infrastructure. I can’t see this government taking on nuclear though, theyve enough to worry about.

Speaking of the national grid it’ll be interesting to see whose balance sheet it will eventually rest on, Networks or Eirgrid, or will we see a new company NetGrid?

@ All

Does anyone else feel a deep since of regret/shame/nausea at seeing Bertie on News of the World adds in a fridge. Tasteless, shameless and defamatory the office of Taoiseach.

This week in particular, it would be foolish to be ideological about the private versus the public models.

Being big always gives advantages for staff in public or private companies – – the latter also when they are dead.

Former Dell and SR Technics maintenance staff have been approved as beneficiaries of the EU Globalisation Adjustment Fund (EGF).

For example the 850 former aircraft maintenance staff will get:

1) guidance and training,
2) on- and off-the-job training,
3) third level education
4) promotion of entrepreneurship and self-employment.

The total estimated cost of the package is almost € 11.5 million, of which the European Union will provide EGF assistance of €7.4 million — even still €4 million will be spent from public funds.

So someone who was made unemployed from a staff of 85 rather than 850 is told get on yer bike; he or she would likely have no pension benefits compared with the big company staff and would have got the basic redundancy compared with 6 weeks for every year of service in the big firms.

Just society indeed – – grab what you can while the going is good!

Staff of the public commercial firms are the most privileged in the workforce.

In the past, they have been given free stakes of up to 15% and pension fund deficits have been funded.

Managers do well with boards packed with political cronies.

If the next government is led by a former trade union official, to win the support of the unions for a big privatisation, they will need a lot of buttering up.

As for the public interest?

@Richard,

As I am sure you are well aware, there is a huge gap between the strap-line a sub-editor puts on a piece and the edited version of the journalist’s/columnist’s piece below it. The strap-line is factually correct, but your highlighting this doesn’t address the issue I am raising.

It would be far better if your paper explicitly stated that it was addressing just one dimension of the SARG’s ToR, as the nature of the funding of certain of the ESRI’s energy policy research activities prevented consideration of other aspects.

In principle there is no doubt that the state should not be holding on assets that are suitable for privatisation. There is no doubt some of them are molly-coddled and inefficient. However, two questions:

Who will buy some of them?
What price will they pay in a fire sale?

New Zealand sold off its Air Force. Why does Ireland need an army or navy?

Disband!

Schooling with payment to students, who study on the internet. Slash education costs and prove we are the Smart economy!

Agriculture: disband and use the civil servants to collect taxes.

Defence: ditto!

Allow the EU to enact laws directly and dismantle the local apparatus.

All commnetators have underestimated the depth of this problem except BPW and the referral to loss of life expectancy!

This is much worse than has been told and the need to hold onto these banks is simply to prevent the full extent being made obvious. It spreads well into the IFSC, so don’t expect to get much tax from there when things get worse!

Thus is not an ideological struggle! I was a union member until my illness. There is no alternative to stopping the borrowing. Even then the economy will fall for a long time/ Remember the geniuses you still revere were “unable” to tell you ahead of time what was going to happen. They are still at that game, by their silence. Directors are selling off their shares as fast as they can in the western economies. They are the ones behind the curve as most are already off the pitch. The dissolution of the economies may still take years, but those at the end of that process, get the least.

Read and understand your economic histories, for the sake of the children if no one else?

Could I make a modest suggestion?

Let us privitise the E(not-much-Social-here-ma’am)RI and open it up to competition. Report-U-Like is a wholly owned subsidiary of Pope Enterprises and will competitively produce reports of any idealogical bent, not just standard Chigaco School/1980s IMF.

For a much more reasonable price we do neo-Stalinist (convert the Golden Circle into a properly disciplined cadre), Social Democrat (somehow stimulate without displeasing the debt-farmers), neo-Fascist (it’s the international Lithuanian conspiracy – expel them now) etc.

Our privatisation report would have been delivered (on foot, natch) by a Workfare slave and comes with a free hand-tooled set of the collected works of Ayn Rand.

You can keep the slave if you want, but you should be warned that they have anger-management issues. Luckily Papal Chemical Security (ready and willing whenever you feel like privatising An Garda Síochána) can supply tranquiliser guns and training in their use.

Non-sarcastically, I don’t buy any of the regulation guff in this report, which is all that distinguishes it from classic neo-liberalism. As someone said above, what we will get, in practice, are more Patrick Nearys.

Real regulation would mean a substantial change in corporate law, allowing free access to data within the beneficiaries of privatisation, democratic veto over their activities, an acceptance that they have to suck up the costs they normally externalise, and preventing them from claiming ‘commercial confidentiality’, whenever it suited them.

@Paul Hunt

Quote:

“It would be far better if your paper explicitly stated that it was addressing just one dimension of the SARG’s ToR, as the nature of the funding of certain of the ESRI’s energy policy research activities prevented consideration of other aspects.”

This is not the first time that you’ve made this assertion about the ESRI – in effect that it is constrained, contractually or otherwise, by the nature of the funding of its energy policy research. Do you have any evidence for this ? If you know of the respective sources of funding and the respective amounts involved, and if you have personal knowledge of arrangements which you can describe explicitly to underpin your assertion quoted above, please share them with us. If you can’t, then you will understand if I regard your remarks as petty mudslinging.

@sean,

I would refer you to this link which describes how the ESRI’s Energy Policy Research Centre is funded:
http://www.esri.ie/research/research_areas/energy/energy_policy_research_ce/

My understanding is that over 50% of funding comes from the sources mentioned.

My simple point is that the ESRI is constrained in terms of the topics it may tackle and how it tackles them. It is no reflection on the calibre or professionalism of the ESRI staff. Indeed, it may not have the resources to tackle certain issues – as ESRI head, Dr. Ruane observed in relation to the financial crisis. Or there may be legal restrictions as John FitzGerald observed in a footnote in his paper at Kenmare last year.

You are free to describe my remarks as petty mudslinging, but I try to back up assertions with evidence and when I express opinions I usually preface them with “in my view” or “I think”.

For me, it is galling that every institution that might provide objective, evidence-based analysis of Ireland’s current travails is compromised to some extent or other.

Paul,

Thanks for your response. I posted the question because I believe that there is a distinct difference between a constraint which was attributable to the availability of funding compared to a constraint due to the “nature” of the funding, as described by you. I see no reason to believe that ESRI’s funding sources affects its ability to be objective, and the degree to which papers can be evidence based depends, in part, on the availability of resources to do the work concerned, as opposed to the sources from which that funding emanates. I think it is useful to make that clear distinction – ESRI is funded by a mix of public and private money and there is no evidence of its ability to be independent being constrained by that.

Richard,

I’m grateful for your clarification.

Sean.

@Colm McCarthy

Now understand the diff between a ‘beauty contest’ and ‘various auctions’ … auctions are certainly more transparent than the former where we may have to rely on the unintended consequences of over-exhuberance with a bag of coke in the capital of casino capitalism …. and the bleeding serfs have to turf up another billion to upper-echelon bottom-feeders while one of the main characters hams it up in the newz-o-de-world ……… Based on recent evidence I stand by my suggestion that the Dept of Justice may be added to your previous work on Bord Snip ….

@Richard Tol
On intangible assets of national strategic (whatever this term means) importance – one controls the space of activity e.g. Ergrid …….. & where appropriate (whatever this term means) let the competitive market into the pathways ……..

Notwithstanding the fact that the political, regulatory, and governance systems of this state failed abjectly over past 10 years – I do not write off the state as the arbiter in areas such as clean water, clean air, health policy, energy policy, telecommunications policy, and others.

@All

If the serfs are not allowed to KUT Turf – then I see no logic in burning the stuff for energy generation (-;

Let the serfs cut turf, let them eat ‘less than zero’, let them drink clean water, let them lease development land to grow spuds, let them have their own nuclear reactor …

@ Garry

“Those who can, do.
Those who no longer can, manage.
Those who never could, teach.
Those who can’t teach but are well connected, regulate.”

Love it.

Regulation is no substitute for competition. The problem with Eircom isn’t that the regulator is too small -the problem is that Eircom is too big. Competition law and the competition authority are too weak in Ireland.

In fact, I don’t know why we bother having a competition authority at all, because they seem to be completely ignored by policymakers. Even the National Competitiveness Council (a slightly more controversial group) seems to be invisible to Govt.

@sean,

I think you are labouring the point unnecessarily. I was a bit slow to pick it up – until Richard highlighted it and I had to awaken some long dormant brain cells, but Richard and his fellow authors decided to couch their submission to SARG in the context of effective regulation and semi-state restructuring that will promote efficiency. Privatisation, per se, is peripheral to this and Tol et al are perfectly justified in concluding that, when viewed in this context – and in this context alone, it may be argued that there is no need to privatise the energy networks.

Richard seems happy to let Colm McCarthy and his colleagues deal with the privatisation dimension themselves. However, given the resouces at their disposal, the scale of the task they are confronting and the time constraint under which they are operating, I am sure that they would welcome additional input from the ESRI on the privatisation dimension – as Ireland is not overflowing with capability in this area that isn’t compromised to some extent or other.

I simply regret that the ESRI has found itself unable to allocate some resource in this area.

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