PRIVATISING the debt-ridden Manx Electricity Authority would be a ‘step too far’, the Chief Minister told Tynwald.
But Allan Bell accepted that there is no conceivable way that the MEA itself will trade out of its present difficulties.
He was responding to a Tynwald question from Alfred Cannan (Michael) who asked when the Council of Ministers will announce their plans to reduce and manage the MEA’s £400 million debts.
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Mr Bell insisted that government hadn’t been complacent in addressing the debt and a series of measures have reduced financing costs by £7 million a year. He said the authority itself was under scrutiny as part of the ongoing Scope of Government review and therefore, it would be ‘somewhat premature’ for CoMin to announce any separate proposals it may have for restructuring the MEA debts.
This prompted Mr Cannan to suggest that it is impossible for the MEA to trade its way out of its debt situation and the only two alternatives for government were to either wipe the slate clean, sell the company or do both.
‘What we must do is free the company of its debt and interest payments in order that it can trade solvently and that is surely the only way we are going to get the MEA back on its feet,’ he said.
Mr Bell replied: ‘I agree there is no conceivable way that the MEA itself will trade out of its present difficulties and financial obligations.
‘Treasury is looking very closely at this at the moment to see what way is possible to alleviate this situation as quickly as we can. Whether we would privatise it and sell it off is another debate for another day, I believe – but I do think it needs radical measures if we are going to bring down the debt which currently bedevils it.’
He said levels of domestic and commercial electricity tariffs had to be tackled as they were having a major impact on disposable family income and acting as a major disincentive for attracting new business to the island.
Castletown MHK Richard Ronan asked: ‘If the right offer came in from the private sector, would the Chief Minister ever consider selling the MEA?’
Mr Bell replied that he wondered whether there would be an appetite to privatise our soul supplier of energy and ‘the risks that might impose’.
He added: ‘We have seen the impact of privatisation of energy, water and various others in the United Kingdom and we have seen what has been an absolute disaster. I would not like to see us become hostage to those same forces which have done so much damage [there].
‘So while I think it still has to be an issue for consideration, my own personal view at this point would be that that would be a step too far in privatisation.’
Tynwald heard that the current freeze in the electricity tariff will last until April 2014. Mr Bell said a strategy would be developed ahead of that April 2014 deadline.
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Sunday 19 May 2013
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