29 July 2004 Edition
Risk free private sector
BY ROBBIE SMYTH
In this era where the privatisation agenda is at full steam ahead in the telecommunications, transport and electricity sectors, the last week has provided a remarkable insight into how the private sector works when it comes to investing its own money into developing infrastructure.
In February, with not a little fanfare, Dermot Ahern, the Minister for Communications, Marine and Natural Resources, announced that the government was seeking tenders from the private sector for the building of two 500-megawatt electricity interconnectors between Ireland and Wales. The total cost would be €250 million.
Private sector companies were unwilling to take on the project; it was too risky for them. However, this week it seems that it is possible for the private sector to be involved in the scheme but only through a public private partnership where the Irish Government guarantees a return on the private sector investment.
So there you have the free market at work, free of risk, with the government picking up the costs.