29 July 2004 Edition

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Risk free private sector


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.

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