ESB privatisation stalled while technicians reject 18% pay offer

In early 2001, the board of Ireland's state-owned electricity provider, the Electricity Supply Board (ESB), rejected for now a privatisation option favoured by its chief executive, while technicians, who make up almost half the ESB workforce, rejected a pay offer worth 18% over national pay norms.

In early 2001, the directors of the Electricity Supply Board (ESB), Ireland's state electricity firm, rejected for the time being the option of privatisation – a route which had been favoured by the company's chief executive, Ken O'Hara. The rejection came soon after a letter was sent to the board by the group of trade unions represented in the company, which expressed the view that the management team was not up to the rigours of competition (IE0004210N). The unions say that this was not intended as a personal criticism of any individual manager, but rather a reflection of the need for training and upgrading of the management team.

The rejection by about 3,000 network technicians, of a pay offer worth 18% over and above the increases provided for in the current national agreement, the Programme for Prosperity and Fairness (PPF) (IE0003149F), has added to ESB's woes. The technicians represent a large part of the company's 8,000-strong workforce. The offer was made in the context of securing work flexibilities aimed at progressing work on an IEP 2.1 billion upgrade of the country's electricity network. The upgrade is necessary for the national economy to overcome serious constraints on infrastructural and industrial development in the coming years. This gives the ESB's problems a wider urgency, which is bringing the situation in the company to the top of the government's agenda

The EU Commissioner for competition, Mario Monti, has already expressed serious reservations about the pace and structure of deregulation in the Irish electricity market (IE9912201N). Several non-ESB power firms are constructing new generating stations, but there has been little or no deregulation in the transmission market.

The network technicians' pay deal, which was rejected by 70% of those involved in a ballot, would have allowed for the use of outside contractors and the introduction of local flexibilities, including allowing technicians to go directly to a site rather than meeting first at an ESB station and moving on from there. Now that the 18% figure has been rejected, it is likely that the eventual settlement for the technicians will have knock-on effects for other groups of ESB employees.

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