The Irish government raised its target for the sale of state assets to 3 billion euros (2.5 billion pounds) on Wednesday, unveiling a final list of utilities set to go on the block headed by the energy business of its Bord Gais utility.
The government had previously said it was looking to raise 2 billion euros but had indicated it may exceed that after winning approval from its EU/IMF creditors to use some of the proceeds to invest in the economy as well as pay down debt.
It said on Wednesday that it will meet most of its new target by selling part of Bord Gais, while the previously announced sale of a minority stake in the state's most valuable asset, the Irish Electricity Supply Board (ESB), is off the table.
Doubts remain over when the government might sell its stake in Aer Lingus
It sounds ambitious, said Eoin Reeves, senior lecturer in privatisation at the University of Limerick, noting that a state-sponsored report valued Bord Gais's regulatory asset base at 3 billion euros and that, according to the Commission For Energy Regulation, 90 percent of profits come from its networks.
That would raise the question over whether Bord Gais can really contribute that much to the 3 billion target. The big news is that there is very little news in this.
Such a scenario could put the brakes on Dublin's plans to reinvest some of the proceeds after it said that although it can plough one third of the amount raised back into the economy, it can only do so after 1 billion euros worth of assets are sold.
If it does hit its target the 2 billion euros set aside to pay down debt will be only a small fraction of the 204 million euros total which Dublin expects the national debt to amount to by 2015, a quadrupling since 2007.
TRAGEDY FOR THE LABOUR PARTY
The government reiterated that it would not be pressured into fire sales and that it did not have to complete the process by the scheduled end of its EU/IMF programme next year.
Anything we sell, we want not only a fair price but a good price. We're not going to short-change the taxpayer in any of this but at the same time we're not going to delay, Minister for Public Expenditure Brendan Howlin told a news conference.
Howlin said the sale of the Bord Gais unit would not include its gas transmission or distribution system, which will remain in state ownership, adding that the government will sell some of the ESB's non-strategic power generation capacity
He added that the sale of the stake in Aer Lingus did not present the best value at today's share price of 0.95 euros, though the government was determined to proceed.
The government is also considering selling the forestry assets of Coillte, a smaller state company set up to manage the the country's forests that has diversified into renewable energy and telecommunications.
While the government has claimed the deal allowing it to reinvest funds as a political victory, particularly after the IMF originally called for 5 billion euros of sales, Howlin's centre-left junior coalition partner Labour came under criticism from its trade union support base.
Labour, which came to power last year on a pledge to replace Frankfurt's way with Labour's way, has seen its support fall a touch in recent opinion polls while its centre-right senior partners Fine Gael have generally fared better.
Today's announcement regarding the sale of some public enterprises is a sad day for the Irish people and a tragedy for the Labour Party, Jack O'Connor, General Secretary of Ireland's largest trade union, SIPTU, said in a statement.
(Editing by Jodie Ginsberg and Greg Mahlich)