# The McCarthy Report on the sale of state assets



## Brendan Burgess (20 Apr 2011)

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We are recommending that there should be a planned programme of asset sales to reduce
the state’s very high level of indebtedness.

We are not recommending an accelerated sale process. This would inhibit attainment of
value and in many cases would not be prudent or even possible given the requirement for
revised regulatory procedures and complex legislation.

We are not putting valuations on individual state assets in this report. These depend on
many factors and ultimately on what a buyer will pay. The net asset value of commercial
company assets whose disposal is recommended is about €5 billion, but net asset value is
no more than a rough guide to what might be realisable.

We are recommending restructuring of state companies and strengthened regulatory
arrangements as preludes to possible sale, but also to enhance the competitiveness of the
economy even if assets are not sold.

We are not recommending that core transmission assets in gas and electricity be sold to
private interests in the immediate future. Such assets have been successfully privatised in
some countries but we believe that disposal in current Irish circumstances involves risks
and that consideration of this option should be deferred.

We are recommending changes in the governance of state bodies while they remain in
public ownership to enhance efficiency and performance. We also propose a review of
regulatory arrangements and a new structure for the oversight of regulatory agencies.
We are not proposing that all assets be disposed of. In the case of land-based assets in
particular, we propose that the state sell the rights to reap the produce of the land but not
the land itself.

We are proposing that intangible assets (rights, licences, options, leases etc.) be treated in
exactly the same way as tangible assets. They should invariably be sold to the highest
bidder.

The Group’s appointment pre-dates the resort, in November 2010, to official financing
from the International Monetary Fund and the EU institutions. The Memorandum of
Understanding dated 28 November 2010 mentions the Group’s consideration of these
issues and enjoins the Irish authorities to consult with the IMF/EU later this year. It does
not specify any target for an asset disposal programme.


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## Brendan Burgess (20 Apr 2011)

*The review included*
Commercial State Bodies
Dublin Airport Authority 
Dublin, Cork and otherport companies
 An Post
Irish Aviation Authority
 Bord Na gCon
 RTÉ
CIE (including Dublin Bus, Irish Rail, Bus Eireann) 
Horse Racing Ireland 
TG4
Irish National Stud Company
National Oil Reserves Agency
ESB 
Bord Na Móna 
Bord Gáis Éireann
EirGrid 
Coillte

Intangible Assets
These include, inter alia, radio spectrum allocated for broadcasting and
telecommunications; carbon emissions permits; and mineral, hydrocarbon and
other licences issued by the state.

*Exclusions from consideration by the Group*
VHI: The VHI was excluded from the Review Group's terms of reference because the
Government had already initiated a separate process that addresses both the sale of the VHI
and the wider complexities involved in the private health insurance market.

The National Oil Reserves Agency (NORA): 
NORA featured in the list of commercial state bodies attached to the Review Group’s terms of reference, agreed by Government in
June 2010. As per the provisions of the National Oil Reserves Agency Act, 2007, NORA is
a non-commercial state agency whose function is to manage the state’s strategic stocks of
oil. Although substantial, the strategic stock cannot realistically be run down because
Ireland is obliged, as a member of the EU and the International Energy Agency (IEA), to
hold stocks of at least 90 days of oil for use in the event of major oil shortages nationally or
internationally. On this basis the Review Group does not propose to make any
recommendations in regard to NORA.

*NAMA: *
The assets held on behalf of the state by the National Asset Management Agency
as part of the Government’s programme of remediation for the banking sector are outside
the terms of reference of the Review Group.

*Banks:* The government has acquired substantial ownership stakes in certain banks as a
result of the rescue and re-capitalisation process. These stakes may be disposed of in due
course but the Group feels that it is too early to consider concrete disposal options.


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## dereko1969 (20 Apr 2011)

Yet another useless McCarthy report. All very very obvious things are included that could have been written by an Executive Officer in the civil service at much less expense, and it's all a case of maybe, but not just yet....


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