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The ESB is one of the State assets that could be recommended for sale in today's McCarthy Report. Julien Behal/PA Archive

McCarthy report will suggest no 'fire sale' of State assets

The latest McCarthy report, discussed at Cabinet yesterday, will argue that selling off assets now won’t get the best price.

THE STATE WILL be advised not to rush into a ‘fire sale’ of its State assets, in a new report set for publication today.

The report of the Review Group on State Assets and Liabilities, commissioned under the last government and led by UCD economist Colm McCarthy, will recommend that selling off some of the State’s companies – the likes of the ESB or Coillte, for example – should not proceed immediately, because of the depressed market prices they would fetch.

While the sale of such assets could net billions for the State, the report will simply argue that hanging onto the assets until a greater economic recovery takes hold will be a more prudent option.

As the Irish Times notes, however, the report will cause some political difficulty for the Fine Gael-Labour coalition – which is bound, under the terms of the EU-IMF agreement, to use any proceeds from the sale of assets to pay off the state’s outstanding debts. That debt is expected to breach the €101 billion barrier at some point this month.

The programme for government also committed the new government to a target of €2bn in sales from the recommendations of the group – though that group is now set to put the brakes on the plan.

The programme did, however, include a disclaimer that State assets would “only be sold when market conditions are right and when adequate regulatory structures have been established to protect consumer interests.”

The new government has also committed not to selling the assets deemed ‘strategic’ for the country, though it is not clear whether the two government parties have reconciled their pre-election differences on which assets are more prerequisite than others.

RTÉ News said it understood that the report would also recommend the merger of the country’s gas and electricity networks, and insist that current State assets spin off their foreign assets.

This will be particularly problematic for the ESB, which just four months ago completed the takeover of Northern Ireland Energy in a deal worth €1.4bn – and which could now be immediately forced to sell it off again.

Among the other assets included in the McCarthy group’s deliberations were An Post, RTÉ and TG4, Bord Gais, Bord na Mona, the Dublin Airport Authority (including the airports at Shannon and Cork), CIE and its subsidiaries, and the country’s ten port and harbour companies.

The State’s holding in the banking sector was not included in the group’s interim terms of reference.

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