Under the terms of the EU-IMF bailout, Ireland has committed to sell off up to €3 billion of State assets. The Government plans to raise between €1-1.4 billion from the sale of a chunk of Bord Gais Energy – business which will be one of the largest ever sales of publicly owned assets on Irish shores. The sale is expected to go ahead towards the end of 2013.
Bord Gais Energy is responsible for the supply, transmission and distribution of natural gas in Ireland and has approximately 1 million customers.
The sale is expected to attract plenty of interest from overseas – with some of the the larger UK utilities expected to bid as well as Chinese and Middle Eastern investors. They will all see the sale as a significant opportunityto invest in assets which would otherwise have remained in public ownership but for the economic downturn and banking crisis. Of course – they will all be thinking of how to maximise the profits that can be made from the Irish consumers.
The latest Bord Gais annual report showed that turnover grew by 5% to €1.608 billion and earnings before interest and tax increased by 4% to €343m. Profit before income tax was €94m . Bord Gais paid a dividend of €33.1m to the exchequer in 2011.
What is up for Sale ?
The sale, , will comprise of Bord Gais Energy’s three main operating areas:
The retail arm which has approximately 468,000 gas and 407,000 electricity customers;
The trading unit which procures gas, electricity and carbon on wholesale markets; and
Assets which include the 445MW Whitegate power station as well as 234MW of operational wind assets and 460MW of wind-energy assets in development.
BGE’s gas transmission or distribution systems and its two gas interconnectors will not be included in the sale.
The Irish Congress of Trade Unions commented earlier in the year on the sale of state assets. They said “Companies like the ESB and Bord Gais – profitable and highly strategic – would be asset-stripped, weakened and eventually destroyed. Partial sales are the slippery slope to full privatisation.“