How interesting to see the transfer of publicly owned assets to the private sector back in vogue. For a number of years now the fashion has been to transfer privately owned assets to the public balance sheet. Will everything go back to the private sector ? Is privatisation the new black ?
Well, that seems like a reasonable case. Nothing like citing the first privatisation to Fascist Italy to leave your reader convinced of your ideological disinterest.
I am also entertained by the assertion that Telecom Éireann would have built a world-class broadband network if those meanie people hadn’t owned it. Just like the government built a world-class water network, or like the ESB built a world-class smart grid.
£65 for a book ! Privatise it. 🙂
If we are to remain in the economic desert we are in now for the next ten years at least then business case would be to hold onto any revenue generating assets; but privatise the culture within these organisations.
I agree with Bond. Eoin Bond on a previous thread 100k for a state employee engineer is just not justified, never mind the pension deals.
To my mind, anyone earning over 75k a year and not able to develop some kind of independent added value to that level of salary is certainly not worth 100k in a billion Euro industry.
Based on previous exchanges with Donal and Eoin, on some exposure to their previous research and on the introduction to this book it’s probably fair to surmise that the main thrust of this laudable effort is to make the case for revitalised SOEs in the 21st century.
My focus is on the utility sectors – transport, water, waste, energy and telecomms – and, in particular, on the networks that provide capacity to deliver these services. Each of the SOE and privatisation models in these sectors suffers from a fundamental problem. The challenge is to develop economic institutions and procedures that transcend these problems.
The former suffers from a naive belief that those who manage and work in SOEs will be so imbued with altruism, the ethos of public service and an overwhelming desire to advance the interests of their fellow citizens that they will cast aside any self-interest and eschew any exercise of the political or economic power with which their SOE statuss endows them.
The latter suffers from the over-riding capitalist desire to boost dividend growth or capital appreciation or both regardless of the impact on consumers, staff or the wider society.
The most effective solution is the private ownership of these networks by pension funds, insurance funds, long-term infrastructure funds or limited partnerships subject to effective policy governance and regulation in the public interest. It also requires the effective collective and adversarial exercise of economic and political power by demand-side users of these network services. This rules out full retail competition in almost all cases.
In addition, it may prove necessary to establish long-term, tradable property rights in the capacity provided by these network and infrastructure facilities.
This would provide assurance for investors and result in an efficient cost of capital. Indeed the cost of capital should be little more than the coupon on sovereign debt – for well-governed sovereigns. (And I accept that this is a major challenge in Ireland with the failures of banking supervision and financial regulation and the widespread, but acknowledged failures of policy and regulation in all other sectors.) There is no reason for governments to tie-up scarce capital in these industries.
“The most effective solution is the private ownership of these networks by pension funds, insurance funds, long-term infrastructure funds or limited partnerships subject to effective policy governance and regulation in the public interest”
The two most destructive forces of human nature—greed and envy—drive the financiers, the bankers, the corporate mandarins and the leaders of our two major political parties, all of whom profit from this system. They place themselves at the center of creation. They disdain or ignore the cries of those below them. They take from us our rights, our dignity and thwart our capacity for resistance. They seek to make us prisoners in our own land. They view human beings and the natural world as mere commodities to exploit until exhaustion or collapse. Human suffering, wars, climate change, poverty, it is all the price of business. Nothing is sacred. The Lord of Profit is the Lord of Death
The president has failed us. The Congress has failed us. The courts have failed us. The press has failed us. The universities have failed us. Our process of electoral democracy has failed us. There are no structures or institutions left that have not been contaminated or destroyed by corporations.
@ seafóid
Irish Constitution
Article 1
The Irish nation hereby affirms its inalienable, indefeasible, and sovereign right to choose its own form of Government, to determine its relations with other nations, and to develop its life, political, economic and cultural, in accordance with its own genius and traditions.
‘Poltical and economic’, gone for now: ‘cultural’, still here. Chin up.
I am not sure whether this thread or the previous thread is the best place to post this comment but either way I hope it is informative.
SALE OF STATE ASSETS AND JOBS/ECONOMIC STIMULUS
1) The government has looked at “selling off” state assets worth between 2bn and 8 Euro and seems to settling on the figure of 2Bn for the moment. The government wants to use proceeds (on sale of 2Bn assets initailly) and the “Troika” has signalled that they may accept the concept rather than insisting that the sales go towards paying down the national debt-
2) However this action faces (which could be turned into support) potential internal opposition from:
A) the centre-right who are reluctant to see a “fire sales”,
B)Centre Left/Unions who have concerns about job security in privatisation
C) Ordinary nationalist of whatever persuasion who fear loss of state assets to overseas interests
3) This internal opposition could be re-solved by “selling” our state assets to the NRPF. The remaining money in the fund , continuing (1%GDP) contributions and annual fund growth of 8% would mean that the NRPF could easily “purchase” 8bn worth of state assets over the next 2-3 years. This would then be used for stimulus and job creation in the economy over the same period of time equating to 5% of GDP and 7% of GNP.
4) Our European partners have budged a bit on the concept of using proceeds form state assets sales to create jobs and it will be harder for them to raid the NRPF.
5)
A)By the end of 2013 90% shares (although the NRPF will have to keep 12.5% to 25%) in “detoxed” and “deleveraged” banks will also be “state assets of some value”.
B) 70% of those bank shares may be sold in 2013-2014 and 2015 and proceeds can be paid toward our national debt. Assuming the whole of Europe has not “defaulted” by then and bondhoders wil lhave not been been to the “hairstylists”. In which case our soverign debt will be a much more healthier kitten (maybe even a tiger cub)
6) A massive job stimulus of between 2bn-8bn would guarnatee huge growth over a 2-3 year period keeping everyone happy.
7)
A) Centre-right worries about “fire sales” of state assets would be abated because any future grrowth will be a direct benefit to the NRPF.
B)Unions and centre left will have less worries about “transfer of undertakings” to NRPF. In a recovered “post stimulus” economy of 2015-2016 employees may indeed look forward to reaping benefits of privatisation (future share options could be offered in lieu of wage rises between 2011 and 2016).
C)As the nation will benefit, and state assets face no immediate risk of being sold overseas this would abate immediate concerns of ordinary nationalists
From my perspective this would be easy for politicians to promote to the electorate and easier for Government managers (under the supervision of elected representatives) to implement over a 24-36 month time frame.
It will also leave the philosophical debate of “privatisation versus nationalisation” or “sovereignty versus colonisation” until the economy has recovered post stimulus in 2014-2016.
After all we have no elections (Local and EP)scheduled until June 2014 and the 31st Dail could theoretically last until Februar 2016 which would leave Labour Party plenty of time to head a powerful opposition for two years but gives us, in the interim, the benefits of a strong government who must do what has to be done until then.
A proper Left/ Right political debate could then take place between 2014 and 2016 and give us all an opportunity to test the competence of certain right wing independents who might be propping (and facing the responsibility of government) up a Fine Gael government.
@ Livonian
That sounds like a bloody good idea to me (inclusive of my comments above re ‘culture’ ).
🙂
@ Ordinary Man
Your comment regarding ESB seems very ill-conceived, almost moronic. I’ve been looking in to this ESB salary thing and there seems to be a lot of heat and no light on the issue.
First off, your 100K DOES include all pension contributions.
If we exclude the pensions the figure is 74k. Still a fine average basic pay…but wait…it’s not the average basic pay.
2) It is the ‘entire wage bill’ divided by the staff. However a large chunk of this wage bill, in the region of 30-40% (I haven’t the exact figure to hand) is expenses. Which on the face of it makes sense, the electricity network doesn’t exactly do 9 to 5, nor is it in one place. Someone has to drive to that fault, at 3 in the morning on Christmas day, so you can eat your turkey.
3) Also there is somewhat of a 2 tier employment system within ESB. You have a kind of old school element, essentially civil servants, who have similar conditions to civil servants. However, over the last 10 years all new staff are on private sector contracts with the ‘get what you pay in’ (if your lucky) style pension. So it could be argued there’s a top heaviness to this figure that will naturally decrease over time.
4)
My understanding is a considerable amount of the ESBs staff have Degrees/Masters/PHDs. Over the last couple of decades all the, time and work intensive jobs appear to have been contracted out, cabling up of cabinets in substations for instance.
5) Electricity generation is extremely capital intensive, for instance in 2009 depreciation on assets was nearly twice the salary bill (including expenses)
Finally the average starting salary for a graduate engineer (most would agree a reasonably difficult and time consuming degree) is €35,000.
So as I said, more heat than light.
…………………….
Anyway aside from all this, at least these guys actually do work. I would have thought the excesses paid to those in the financial services sector, and it’s corresponding brain drain affect would be far worthier of scathing.
……………………………………………………………………….
@ All
By the by, I’d like to ask a question. It seems to me the meat in the sell off sandwich is ‘The distribution’ network, i.e. the wire and poles at the end of the street (not to be confused with the transmission network). I say meat because it’s worth nearly 5 billion euro! The question is, am I right in my reading of the report, is he suggesting we sell this!? Someone please contradict me.
For those interested in an earlier examination of privatisation in Ireland by Donal Palcic and Eoin Reeves, there’s this paper published in the Journal of the Statistical and Social Inquiry Society of Ireland: http://www.tara.tcd.ie/bitstream/2262/8758/5/JssisiVolXXXIV1_27.pdf
what I find funny about the privitsation debate is the claim that a natinoalised company might end up finding favour with the govt. or might avoid making hard decisions because the govt, would facilitate it.
But isnt that the story of the Irish private sector – crony connnections, outdated company laws and no regulation and poor mamagement all backed by govt.
Nationalised is not bad and privatised is not an unalloyed good.
@celtic phoneix
“entire wage bill’ divided by the staff. However a large chunk of this wage bill, in the region of 30-40% (I haven’t the exact figure to hand) is expenses.”
ME – How do you tell this.? Wages and expenses are very different things certainly from the point of view of the employee. I would have expected wages to include only wages. Crazy i know, but let us know anyway how you have found this.
@celtic phoneix – “However, over the last 10 years all new staff are on private sector contracts with the ‘get what you pay in’ (if your lucky) style pension.”
ME – Not true. I started in a semi state 3 years ago and im glad to say that the defined benefit pension is still alive and well.
@ Celtic Pheonix.
Your comment regarding ESB seems very ill-conceived, almost moronic.
Almost?
I worked in the industry from 1981 – 1988 – Engineer. Allegely a ‘Golden Boy’ who during his first three months on the job has to show an ‘Engineer’ of 18 years standing how to conduct and earth resistance test for a step down transformer as he hadn’t a clue.
Promoted to ‘neutralisation’ by the ‘mediocritees’ and spent the last two years in an ‘office’ with no function – but still got full pay.
On my own initiative translated the schematic of a cities HV distribution network to a written destination to destination spreadsheet type document to make understanding the ‘network’ more ‘readable for ‘personel (Civil Service type Engineers? Your words.)
There are many fine, dedicated and ‘world class’ engineers and staff of all grades in the industry in Ireland – it’s the self agrandisees of mediocrity that ruin organisations like that and countries like this (banks, civil service the lot).
Do you know how they got rid of engineers – paid them a lump sum and half their salary per annum just to go !
Would you work there for half the money?.
I think the Judge clarified the rest of you points up adequately.
Seafoid quoting Chris Hedges:
“The most effective solution is the private ownership of these networks by pension funds, insurance funds, long-term infrastructure funds or limited partnerships subject to effective policy governance and regulation in the public interest”
Well, they were largely the owners of the banks, both the equity and the debt (and probably much of the deposits too). Admittedly the “regulation in the public interest” was lacking, but “effective policy governance” was not – the government wanted a credit fuelled property boom in 2002 to keep their developer friends show on the road, the banks obliged – playing both sides of the deal usually – giving outrageous multiples for properties they had financed the constuction of…
All for it – let’s privatise the bleed1n banks and all their losses: debt for equity with the ECB and LBS as chairman of the bored ….
Governance & Regulation around here, based on recent empirics, are in somewhat of a shambles. Still are … wonder does Mr Elderfield need a broader remit … and a battalion of the army – must be enough leuder_amadans still running amok to fill the Curragh Camp – and about time we put it to reasonable use. Senior Counsels, of course, advises against it – so let’s toss them in as well. The Law appears to be an appendage of the leuder_amadan upper-echleon sect that led us into present mess ….. might even be time for The Dail to discover the “L” plate and get on with Legislation ………. if it isn’t too much to ask of ‘legislators’ ….
I may have missed something , but it seems there are some 15 commnets here on privatisation in Irealnd with not a mention of eircom, the sugar company or Team Aer Lingus.
Is Irish economics an entirely evidence-free zone?
Hogan
Paul Hunt was responsible for that quote. It stuck me as very hopeful. The Irish pension fund industry got sucked into the same vortex as the banks .
Slide 3 is instructive, especially relating to assets
I may have missed something , but it seems there are some 15 commnets here on privatisation in Irealnd with not a mention of eircom, the sugar company or Team Aer Lingus.
Let’s not forget the second mobile phone licence either.
@ Edward
I am also entertained by the assertion that Telecom Éireann would have built a world-class broadband network if those meanie people hadn’t owned it. Just like the government built a world-class water network, or like the ESB built a world-class smart grid.
I’m sorry, but I had to respond to this – the ignorance on display is just too maddening.
That you now enjoy the provision of water, electricity and even sewers is entirely due to government works (local and central). The track record of what happens if it’s left up to ‘private enterprise’ and the ‘invisible hand’ to provide these basics of civilisation is pretty sordid (and can be seen even today in areas like Internet access).
@seafoid
Oops. Thanks – serves me right for trying to remember while getting to the bottom of the page 😳
@EWI
‘Let’s not forget the second mobile phone licence either.’
Now … let me try to remember … who got the first one? What happened to first mover advantage?
Whatever comes to pass on the privatization front, one can be sure it will proceed with greater alacrity and enthusiasm than any reform of the legal sector payola regardless of OECD exhortations.
What a generous free sample from the publisher! Full contents plus 7-page intro.
Very easy, easygoing style of writing, and not a footnote in sight.
Interesting theories about why privatisation got going in the ’70s.
Greater depth and breadth of vision than Paul Sweeney’s “Selling out- privatisation in Ireland”.
At €65 its a bit expensive for the ordinary man, as “Ordinary Man” notes earlier. But idefinitely would be worth cadging from librarians.
It’s always easy to find examples to support a particular view as badly run companies can be found in both the public and private sectors.
Delusional folk can see greed in the private sector but are blind to the primacy of self-interest that is also common in the public sector.
Payroll costs are only one aspect of direct and overhead costs but whether in the public or private sectors, leaders with crony boards who put their own interests first, seldom have a record of success.
It’s very hard to change an organizational culture and as regards Eircom, the phone service was a function of the Dept of Posts and Telegraphs until 1984.
A monopoly has particular difficulty in responding to change and competition. Aer Lingus only woke up to the potential of the web when change was forced on it by Willie Walsh after huge losses.
Telecom Éireann had been operating 16 years before privatisation and in the 1990s it had big budgets but a patchy performance.
In contrast, through the decades, the ESB appears to have been much better run and its customer service reputation was much higher.
Can someone explain to me please why the country still gives huge subsidies to the horse and greyhound racing ‘industries’?
Surely the simplest thing for the government to do is to withdraw the grants from these cosseted groups and tell them to act like any other industry – pay their own way. The Coalition is four weeks in power and move towards snipping is tortoise paced. At this rate, the government will comfortably slip into the summer holidays with no thrift decisions under its belt.
Excellent site. A lot of useful information here. I’m sending it to several pals ans additionally sharing in delicious. And obviously, thanks to your effort!
26 replies on “Privatisation in Ireland”
How interesting to see the transfer of publicly owned assets to the private sector back in vogue. For a number of years now the fashion has been to transfer privately owned assets to the public balance sheet. Will everything go back to the private sector ? Is privatisation the new black ?
Well, that seems like a reasonable case. Nothing like citing the first privatisation to Fascist Italy to leave your reader convinced of your ideological disinterest.
I am also entertained by the assertion that Telecom Éireann would have built a world-class broadband network if those meanie people hadn’t owned it. Just like the government built a world-class water network, or like the ESB built a world-class smart grid.
£65 for a book ! Privatise it. 🙂
If we are to remain in the economic desert we are in now for the next ten years at least then business case would be to hold onto any revenue generating assets; but privatise the culture within these organisations.
I agree with Bond. Eoin Bond on a previous thread 100k for a state employee engineer is just not justified, never mind the pension deals.
To my mind, anyone earning over 75k a year and not able to develop some kind of independent added value to that level of salary is certainly not worth 100k in a billion Euro industry.
Based on previous exchanges with Donal and Eoin, on some exposure to their previous research and on the introduction to this book it’s probably fair to surmise that the main thrust of this laudable effort is to make the case for revitalised SOEs in the 21st century.
My focus is on the utility sectors – transport, water, waste, energy and telecomms – and, in particular, on the networks that provide capacity to deliver these services. Each of the SOE and privatisation models in these sectors suffers from a fundamental problem. The challenge is to develop economic institutions and procedures that transcend these problems.
The former suffers from a naive belief that those who manage and work in SOEs will be so imbued with altruism, the ethos of public service and an overwhelming desire to advance the interests of their fellow citizens that they will cast aside any self-interest and eschew any exercise of the political or economic power with which their SOE statuss endows them.
The latter suffers from the over-riding capitalist desire to boost dividend growth or capital appreciation or both regardless of the impact on consumers, staff or the wider society.
The most effective solution is the private ownership of these networks by pension funds, insurance funds, long-term infrastructure funds or limited partnerships subject to effective policy governance and regulation in the public interest. It also requires the effective collective and adversarial exercise of economic and political power by demand-side users of these network services. This rules out full retail competition in almost all cases.
In addition, it may prove necessary to establish long-term, tradable property rights in the capacity provided by these network and infrastructure facilities.
This would provide assurance for investors and result in an efficient cost of capital. Indeed the cost of capital should be little more than the coupon on sovereign debt – for well-governed sovereigns. (And I accept that this is a major challenge in Ireland with the failures of banking supervision and financial regulation and the widespread, but acknowledged failures of policy and regulation in all other sectors.) There is no reason for governments to tie-up scarce capital in these industries.
“The most effective solution is the private ownership of these networks by pension funds, insurance funds, long-term infrastructure funds or limited partnerships subject to effective policy governance and regulation in the public interest”
http://www.americanpendulum.com/2011/04/chris-hedges-throw-out-the-money-changers/
The two most destructive forces of human nature—greed and envy—drive the financiers, the bankers, the corporate mandarins and the leaders of our two major political parties, all of whom profit from this system. They place themselves at the center of creation. They disdain or ignore the cries of those below them. They take from us our rights, our dignity and thwart our capacity for resistance. They seek to make us prisoners in our own land. They view human beings and the natural world as mere commodities to exploit until exhaustion or collapse. Human suffering, wars, climate change, poverty, it is all the price of business. Nothing is sacred. The Lord of Profit is the Lord of Death
The president has failed us. The Congress has failed us. The courts have failed us. The press has failed us. The universities have failed us. Our process of electoral democracy has failed us. There are no structures or institutions left that have not been contaminated or destroyed by corporations.
@ seafóid
Irish Constitution
Article 1
The Irish nation hereby affirms its inalienable, indefeasible, and sovereign right to choose its own form of Government, to determine its relations with other nations, and to develop its life, political, economic and cultural, in accordance with its own genius and traditions.
‘Poltical and economic’, gone for now: ‘cultural’, still here. Chin up.
I am not sure whether this thread or the previous thread is the best place to post this comment but either way I hope it is informative.
SALE OF STATE ASSETS AND JOBS/ECONOMIC STIMULUS
1) The government has looked at “selling off” state assets worth between 2bn and 8 Euro and seems to settling on the figure of 2Bn for the moment. The government wants to use proceeds (on sale of 2Bn assets initailly) and the “Troika” has signalled that they may accept the concept rather than insisting that the sales go towards paying down the national debt-
2) However this action faces (which could be turned into support) potential internal opposition from:
A) the centre-right who are reluctant to see a “fire sales”,
B)Centre Left/Unions who have concerns about job security in privatisation
C) Ordinary nationalist of whatever persuasion who fear loss of state assets to overseas interests
3) This internal opposition could be re-solved by “selling” our state assets to the NRPF. The remaining money in the fund , continuing (1%GDP) contributions and annual fund growth of 8% would mean that the NRPF could easily “purchase” 8bn worth of state assets over the next 2-3 years. This would then be used for stimulus and job creation in the economy over the same period of time equating to 5% of GDP and 7% of GNP.
4) Our European partners have budged a bit on the concept of using proceeds form state assets sales to create jobs and it will be harder for them to raid the NRPF.
5)
A)By the end of 2013 90% shares (although the NRPF will have to keep 12.5% to 25%) in “detoxed” and “deleveraged” banks will also be “state assets of some value”.
B) 70% of those bank shares may be sold in 2013-2014 and 2015 and proceeds can be paid toward our national debt. Assuming the whole of Europe has not “defaulted” by then and bondhoders wil lhave not been been to the “hairstylists”. In which case our soverign debt will be a much more healthier kitten (maybe even a tiger cub)
6) A massive job stimulus of between 2bn-8bn would guarnatee huge growth over a 2-3 year period keeping everyone happy.
7)
A) Centre-right worries about “fire sales” of state assets would be abated because any future grrowth will be a direct benefit to the NRPF.
B)Unions and centre left will have less worries about “transfer of undertakings” to NRPF. In a recovered “post stimulus” economy of 2015-2016 employees may indeed look forward to reaping benefits of privatisation (future share options could be offered in lieu of wage rises between 2011 and 2016).
C)As the nation will benefit, and state assets face no immediate risk of being sold overseas this would abate immediate concerns of ordinary nationalists
From my perspective this would be easy for politicians to promote to the electorate and easier for Government managers (under the supervision of elected representatives) to implement over a 24-36 month time frame.
It will also leave the philosophical debate of “privatisation versus nationalisation” or “sovereignty versus colonisation” until the economy has recovered post stimulus in 2014-2016.
After all we have no elections (Local and EP)scheduled until June 2014 and the 31st Dail could theoretically last until Februar 2016 which would leave Labour Party plenty of time to head a powerful opposition for two years but gives us, in the interim, the benefits of a strong government who must do what has to be done until then.
A proper Left/ Right political debate could then take place between 2014 and 2016 and give us all an opportunity to test the competence of certain right wing independents who might be propping (and facing the responsibility of government) up a Fine Gael government.
@ Livonian
That sounds like a bloody good idea to me (inclusive of my comments above re ‘culture’ ).
🙂
@ Ordinary Man
Your comment regarding ESB seems very ill-conceived, almost moronic. I’ve been looking in to this ESB salary thing and there seems to be a lot of heat and no light on the issue.
First off, your 100K DOES include all pension contributions.
If we exclude the pensions the figure is 74k. Still a fine average basic pay…but wait…it’s not the average basic pay.
2) It is the ‘entire wage bill’ divided by the staff. However a large chunk of this wage bill, in the region of 30-40% (I haven’t the exact figure to hand) is expenses. Which on the face of it makes sense, the electricity network doesn’t exactly do 9 to 5, nor is it in one place. Someone has to drive to that fault, at 3 in the morning on Christmas day, so you can eat your turkey.
3) Also there is somewhat of a 2 tier employment system within ESB. You have a kind of old school element, essentially civil servants, who have similar conditions to civil servants. However, over the last 10 years all new staff are on private sector contracts with the ‘get what you pay in’ (if your lucky) style pension. So it could be argued there’s a top heaviness to this figure that will naturally decrease over time.
4)
My understanding is a considerable amount of the ESBs staff have Degrees/Masters/PHDs. Over the last couple of decades all the, time and work intensive jobs appear to have been contracted out, cabling up of cabinets in substations for instance.
5) Electricity generation is extremely capital intensive, for instance in 2009 depreciation on assets was nearly twice the salary bill (including expenses)
Finally the average starting salary for a graduate engineer (most would agree a reasonably difficult and time consuming degree) is €35,000.
So as I said, more heat than light.
…………………….
Anyway aside from all this, at least these guys actually do work. I would have thought the excesses paid to those in the financial services sector, and it’s corresponding brain drain affect would be far worthier of scathing.
……………………………………………………………………….
@ All
By the by, I’d like to ask a question. It seems to me the meat in the sell off sandwich is ‘The distribution’ network, i.e. the wire and poles at the end of the street (not to be confused with the transmission network). I say meat because it’s worth nearly 5 billion euro! The question is, am I right in my reading of the report, is he suggesting we sell this!? Someone please contradict me.
For those interested in an earlier examination of privatisation in Ireland by Donal Palcic and Eoin Reeves, there’s this paper published in the Journal of the Statistical and Social Inquiry Society of Ireland: http://www.tara.tcd.ie/bitstream/2262/8758/5/JssisiVolXXXIV1_27.pdf
what I find funny about the privitsation debate is the claim that a natinoalised company might end up finding favour with the govt. or might avoid making hard decisions because the govt, would facilitate it.
But isnt that the story of the Irish private sector – crony connnections, outdated company laws and no regulation and poor mamagement all backed by govt.
Nationalised is not bad and privatised is not an unalloyed good.
@celtic phoneix
“entire wage bill’ divided by the staff. However a large chunk of this wage bill, in the region of 30-40% (I haven’t the exact figure to hand) is expenses.”
ME – How do you tell this.? Wages and expenses are very different things certainly from the point of view of the employee. I would have expected wages to include only wages. Crazy i know, but let us know anyway how you have found this.
@celtic phoneix – “However, over the last 10 years all new staff are on private sector contracts with the ‘get what you pay in’ (if your lucky) style pension.”
ME – Not true. I started in a semi state 3 years ago and im glad to say that the defined benefit pension is still alive and well.
@ Celtic Pheonix.
Your comment regarding ESB seems very ill-conceived, almost moronic.
Almost?
I worked in the industry from 1981 – 1988 – Engineer. Allegely a ‘Golden Boy’ who during his first three months on the job has to show an ‘Engineer’ of 18 years standing how to conduct and earth resistance test for a step down transformer as he hadn’t a clue.
Promoted to ‘neutralisation’ by the ‘mediocritees’ and spent the last two years in an ‘office’ with no function – but still got full pay.
On my own initiative translated the schematic of a cities HV distribution network to a written destination to destination spreadsheet type document to make understanding the ‘network’ more ‘readable for ‘personel (Civil Service type Engineers? Your words.)
There are many fine, dedicated and ‘world class’ engineers and staff of all grades in the industry in Ireland – it’s the self agrandisees of mediocrity that ruin organisations like that and countries like this (banks, civil service the lot).
Do you know how they got rid of engineers – paid them a lump sum and half their salary per annum just to go !
Would you work there for half the money?.
I think the Judge clarified the rest of you points up adequately.
Seafoid quoting Chris Hedges:
“The most effective solution is the private ownership of these networks by pension funds, insurance funds, long-term infrastructure funds or limited partnerships subject to effective policy governance and regulation in the public interest”
Well, they were largely the owners of the banks, both the equity and the debt (and probably much of the deposits too). Admittedly the “regulation in the public interest” was lacking, but “effective policy governance” was not – the government wanted a credit fuelled property boom in 2002 to keep their developer friends show on the road, the banks obliged – playing both sides of the deal usually – giving outrageous multiples for properties they had financed the constuction of…
All for it – let’s privatise the bleed1n banks and all their losses: debt for equity with the ECB and LBS as chairman of the bored ….
Governance & Regulation around here, based on recent empirics, are in somewhat of a shambles. Still are … wonder does Mr Elderfield need a broader remit … and a battalion of the army – must be enough leuder_amadans still running amok to fill the Curragh Camp – and about time we put it to reasonable use. Senior Counsels, of course, advises against it – so let’s toss them in as well. The Law appears to be an appendage of the leuder_amadan upper-echleon sect that led us into present mess ….. might even be time for The Dail to discover the “L” plate and get on with Legislation ………. if it isn’t too much to ask of ‘legislators’ ….
I may have missed something , but it seems there are some 15 commnets here on privatisation in Irealnd with not a mention of eircom, the sugar company or Team Aer Lingus.
Is Irish economics an entirely evidence-free zone?
Hogan
Paul Hunt was responsible for that quote. It stuck me as very hopeful. The Irish pension fund industry got sucked into the same vortex as the banks .
https://web.actuaries.ie/sites/default/files/event/2010/05/100505%20Approaching%20Benefit%20Reduction%20Proposals.pdf
Slide 3 is instructive, especially relating to assets
I may have missed something , but it seems there are some 15 commnets here on privatisation in Irealnd with not a mention of eircom, the sugar company or Team Aer Lingus.
Let’s not forget the second mobile phone licence either.
@ Edward
I am also entertained by the assertion that Telecom Éireann would have built a world-class broadband network if those meanie people hadn’t owned it. Just like the government built a world-class water network, or like the ESB built a world-class smart grid.
I’m sorry, but I had to respond to this – the ignorance on display is just too maddening.
That you now enjoy the provision of water, electricity and even sewers is entirely due to government works (local and central). The track record of what happens if it’s left up to ‘private enterprise’ and the ‘invisible hand’ to provide these basics of civilisation is pretty sordid (and can be seen even today in areas like Internet access).
@seafoid
Oops. Thanks – serves me right for trying to remember while getting to the bottom of the page 😳
@EWI
‘Let’s not forget the second mobile phone licence either.’
Now … let me try to remember … who got the first one? What happened to first mover advantage?
Whatever comes to pass on the privatization front, one can be sure it will proceed with greater alacrity and enthusiasm than any reform of the legal sector payola regardless of OECD exhortations.
What a generous free sample from the publisher! Full contents plus 7-page intro.
Very easy, easygoing style of writing, and not a footnote in sight.
Interesting theories about why privatisation got going in the ’70s.
Greater depth and breadth of vision than Paul Sweeney’s “Selling out- privatisation in Ireland”.
At €65 its a bit expensive for the ordinary man, as “Ordinary Man” notes earlier. But idefinitely would be worth cadging from librarians.
It’s always easy to find examples to support a particular view as badly run companies can be found in both the public and private sectors.
Delusional folk can see greed in the private sector but are blind to the primacy of self-interest that is also common in the public sector.
Payroll costs are only one aspect of direct and overhead costs but whether in the public or private sectors, leaders with crony boards who put their own interests first, seldom have a record of success.
It’s very hard to change an organizational culture and as regards Eircom, the phone service was a function of the Dept of Posts and Telegraphs until 1984.
A monopoly has particular difficulty in responding to change and competition. Aer Lingus only woke up to the potential of the web when change was forced on it by Willie Walsh after huge losses.
Telecom Éireann had been operating 16 years before privatisation and in the 1990s it had big budgets but a patchy performance.
In contrast, through the decades, the ESB appears to have been much better run and its customer service reputation was much higher.
Can someone explain to me please why the country still gives huge subsidies to the horse and greyhound racing ‘industries’?
Surely the simplest thing for the government to do is to withdraw the grants from these cosseted groups and tell them to act like any other industry – pay their own way. The Coalition is four weeks in power and move towards snipping is tortoise paced. At this rate, the government will comfortably slip into the summer holidays with no thrift decisions under its belt.
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