Anyone for the last of the semi-states?

It reminds me of Croke Park when the hustle is on to sell the last few choc ices. Rather than be left with a soggy mess that was worth nothing the hucksters got more vocal, desperate to flog off the last ice cream.
It may be just April but already there is the hint of action in the air as a state of panic seems to be breaking about price of semi states and as to whether enough of them will be sold to keep the market analysts happy.

A few years ago Colm McCarthy produced his own hit list of public services that should be either ended or sold off so that the state finances would remain stable. If only the destruction of our state by the Greens and FF had ended at that by now we could at least be trying to reconstruct the country, but No.
Colm McCarthy is back this time recommending that €5B can be raised by flogging off the family silver; ESB, An Bord Gais as well as Bertie’s mates in Coilte are lined up while the big land bank belonging to CIE in Dublin Port will attract some speculators. How did we get here? Well lets look at some of the previous privatisations and see what was learnt.

The elephant in the room is the FF practice of packing state boards with directors with interests in property. They’re everywhere that there’s land. The former state owned shipping line Irish Ferries has a share value that exceeds a value you’d expect as the board members who again are property magnates bring their expertise to bear on the potential for asset stripping. Asset stripping is not just a FF core value. The former state owned sugar company’s CEO just happens to be the brother of the Agriculture Minister. Greencore closed its sugar producing arm at the height of the bubble and accepted compensation to morph into a property company. We now know the information used to arrive at the closure decision was wrong but will the company do a U turn and re-enter sugar production? Extremely unlikely.

So what will we do when one of the soon to be privatised companies takes a decision that is not in the countries interest but is most definitely in the interest of the company? As it is there’s at least one semi state board where already that happened anyway and little was done about it. I’m thinking of Irish Rail where Rosslare Harbour has been effectively mothballed by its owner. Rail services disconnected and ended, recently shipping lines seem to have indicated that they will end foot passenger services as the facilities in terms of onward connections have been axed by CIE. All this happened under the previous governments watch.

So whether a company is state owned or privatised seems to matter little to board members who rarely see themselves as having a culture of serving the public. As a result I would shed no tears if Rosslare Harbour was sold out of state ownership provided the new owner was interested in investing to compete with Dublin or Cork and restore rail and bus services. It would matter little to many in Wexford if the directors fees were paid out of the private purse rather than state coffers already depleted by the speculator class. In fact if a private company was committed to the port in the long haul there would be few politicians in Wexford who would shed tears for Irish Rail such is the poor level of service and investment.

Aer Lingus Gatwick hub and Mannon's parachute proves opponents of privatisation right

Just 3 years ago the Irish taxpayer was sold a line on Aer Lingus that privatistion was in the interest of Irish consumers. We were told that as a small island having 2 airlines competing would be in our interests. A private airline could develop more routes out of Ireland. The slots at Heathrow were ring fenced for Ireland. We know that when Aer Lingus set up in Belfast that the argument was that it would have benefits for Donegal and the North West. I’m pleased that Aer Lingus have recognised the madness of the decision to end the Shannon Heathrow flights and that they have re-opened that route. The argument made at the time that the Irish public would benefit from privitisation is begingin now to be seen for the ruse that it was, it was all about the company being profitable regardless. As a result the board does what it sees fit to be profitable.
So maybe Minister Dempsey may be able to tell me how does the economy benefit by having aircraft based on Gatwick to serve Dublin and Knock among other routes to be served from the British hub. These aircraft it seems were bought with money raised by the company after privatisation and now crewed by workers based outside the country. One wonders whether the customary cuplá focal will be spoken to the passengers anymore on flights inward onto Ireland from Gatwick. I remember predicting on local radio at the time of privatisation that soon the only thing original about the company would be the shamrock on the tail and unfortunately it seems I’m proved right again. I believe that many tickets on these new routes out of Gatwick are being off loaded below cost so as to compete with Easy Jet.
Aer Lingus’s history of setting up routes based on UK to European traffic hasn’t been good. In the 90’s they exploited a relaxation in rules on third country carriers by opening routes from Birmingham and Bristol to the low countries and got badly burnt. Gatwick is a huge gamble that the Irish travelling public does not have to subsidise but may suffer the consequences should the company lose significantly while attempting to expand during a recession. While Aer Lingus sits on a significant cash reserve, one more significant than many other airlines, money is no defence against bad business decisions. It already has to fund a redundancy deal and has bought more long haul aircraft than it uses. The CEO who should have understood the Middle East better lost heavily on a route to Dubai. Why did they not link with another airline flying onward to Australia through here? how does investing in Gatwick benefit the Irish economy right now?
While the popular view is that privatisation allows management take decisions in line with the market, who takes the decisions in the interest of our economy? The government have already admitted that their 25% stake holding couldn’t protect the Shannon route, so how can they influence a whole board as it sets out into the wider market? This morning's decision by Dermot Mannion to resign and take wiht him a golden handshake at a time when workers are being shed is a smack in the face for those workers who took a hit. The golden parachute has opened. Who'll miss him? Turbulent times and tears may well be ahead.