Privatisation train set to roll
O'Rourke must have a public debate on sell-offs
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There has never been a debate in Ireland about the privatisation
process. Instead it is taken for granted that auctioning state
utilities should be a fact of life
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What will lead to less jobs, more wages and perks for executives,
a worse service for consumers and the transfer of Irish resources
into the hands of foreign multinationals? One answer -
privatisation.
Planes, trains, phonelines, post offices and banks are all set to
come under the auctioneer's hammer in the 26 Counties over coming
months. Chief auctioneer is the minister for Public Enterprise
Mary O'Rourke. In the past fortnight O'Rourke has been moving
forward the process of privatising Telecom and TEAM Aer Lingus.
The logic behind selling off state assets is a two pronged one.
One argument frequently used in favour of sell offs is that the
public sector companies up for sale are inefficient and cannot be
run properly in the public sector.
The second argument is an ideological one. Many of our public
owned companies such as the ESB, Telecom and An Post have social
market monopolies. Free market economics dictates that these
markets must be competitive in that there must be more than one
company operating in the market and all those companies must be
owned by the private not the public sector.
In the case of the 26-County economy many of its public utilities
were formed because the private sector refused to invest in these
economic sectors. It was the state who made the investment and
took the risk. Now after years of investment and with most public
sector companies in profit they are ready for sell offs.
Already shares in Telecom have been sold to a foreign
communications company at half the price paid by Telecom workers
for their 15% share.
In the early 1990s Suicre Eireann was privatised, becoming
Greencore. In 1991 some of the company's directors were shown to
have used the privatisation process for their own private gain to
the tune of £8 million.
The salaries of executive directors at Greencore and Irish Life,
another privatised company, are tens of thousands of punts in
excess of those they would have earned in the public sector for
doing the same job. The wages of their workers have not increased
by the same levels.
The impetus for privatisation programmes comes from two sectors.
One is from the private sector itself who are anticipating asset
stripping public sector companies. The other impetus is the
European Commission who want the EU to be an open market economy
and have demanded that the member states sell off their public
sector assets.
Margaret Thatcher's Conservative government led the way in
privatisation programmes, selling off every possible public
utility including telecommunications, gas, electricity, airlines,
steel companies, coal mines, railways, hospitals and even water
services.
Between 1979 and 1995 the numbers employed in these industries
fell by 80%. Privatised water companies had by April 1997
declared over £10 billion pounds in profits since privatisation,
while 30% of the water supply was leaking through faulty pipes.
There has never been a debate in Ireland about the privatisation
process. Instead it is taken for granted that auctioning state
utilities should be a fact of life.
Last week TEAM Aer Lingus workers who voted against the sell off
of their company to a Danish aircraft maintenance firm showed
that there is still some opposition to the privatisation
rollercoaster. The craftworkers were acting very much in their
own interests rather than national ones. However the media
reaction to the TEAM workers No vote showed clearly the bias in
favour of relentless privatisation of state resources.
The TEAM workers met minister O'Rourke and asked that TEAM should
remain part of Aer Lingus. She gave them a hearing. But at the
same time O'Rourke has announced that she is speeding up the
process of privatising Telecom and the company could be sold by
next year. Now she should take a further step and initiate a
public debate on the privatisation process.
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