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Thread: State Companies v Private Companies

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    Politics.ie Member hammer's Avatar
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    Default State Companies v Private Companies

    | Irish Examiner

    When a private company is struggling it needs to cut costs to survive. Government insists that we must regain our competiveness.

    State Company makes 38 million PROFIT and revenue is down, so to survive it increases its prices

    Seriously are we thick. Surely the Government should step in and get them to reduce costs. Encourage tourists etc............

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    Really depends on what the business of the state co. is.Very few private companies have a monoploly on a particular product or service where as the state due to overhead costs or expense of certain lines of business have no choice but to increase costs as sometimes even 38 million would only be a drop in the ocean if things didnt exactly go to plan.
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    Would it not be better if the state just owned the infrastructure (electricity broadband etc) and allowed private companies to sell these services to the people with the appropriate regulation.
    So then we wouldnt have a situation where the semi state ESB owns the electricity grid and sells to companies like Bord gas at inflated prices and the ESB themselves can't drop their prices due to daft competition rules which keep the price inflated in the first place?
    Or am i wrong in that assumption? And for Eircom and broadband provision. So the state own the broadband network and then sell to various private companies to provide competition in the market...

    Same goes for the airports. Own the building etc and lease to private companies willing to provide best service at best price. again with proper regulation. Just as the authority rents out slots to different airlines.
    So then you would not have massive costs for state, if you just owned the infrastructure.
    Last edited by toasteroven; 29th April 2010 at 12:25 AM.

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    Quote Originally Posted by toasteroven View Post
    Would it not be better if the state just owned the infrastructure (electricity broadband etc) and allowed private companies to sell these services to the people with the appropriate regulation.
    So then we wouldnt have a situation where the semi state ESB owns the electricity grid and sells to companies like Bord gas at inflated prices and the ESB themselves can't drop their prices due to daft competition rules which keep the price inflated in the first place?
    Or am i wrong in that assumption? same goes for Eircom and broadband provision. So the state own the broadband network and then sell to various private companies to provide competition in the market...
    I brought up this very point on the Frontline programme this week, in the discussion on Ireland's energy future.

    I think Minister Ryan felt that I was attacking his party, I wasn't, I was attacking the system, we need to be light on our feet in these challenging times.
    Regards, Pat Gill

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    Quote Originally Posted by fiannafailure View Post
    I brought up this very point on the Frontline programme this week, in the discussion on Ireland's energy future.

    I think Minister Ryan felt that I was attacking his party, I wasn't, I was attacking the system, we need to be light on our feet in these challenging times.
    oh good, so I'm not completely mad in my thinking. Thanks!

    Well done for bringing it up.

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    Quote Originally Posted by hammer View Post
    | Irish Examiner

    When a private company is struggling it needs to cut costs to survive. Government insists that we must regain our competiveness.

    State Company makes €38 million PROFIT and revenue is down, so to survive it increases its prices

    Seriously are we thick. Surely the Government should step in and get them to reduce costs. Encourage tourists etc............
    No, we are not thick but we are being taken for dopes. With the most successful airline leading the idea that if you REDUCE prices you make MORE revenue through increased demand it is beyond my understanding that someone on a €308k salary could not understand elasticity of demand.

    In 2009 Noel Dempsey made an announcement that Dublin Bus would increase fares because they were not making enough revenue. Twelve months later they are looking at another 150 or so redundancies. I'm afraid these people only know how to cause death by a thousand cuts.
    We are "they"

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    and also as owners of the infrastructure you could plan for public interest directors on the boards of these private companies to ensure best service for comsumer similiar to what the government have done with the banks (well except in FFs case that has been completely useless)

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    [quote=CharlieB;2634747]

    Welcome to P.ie, CharlieB

    ESB Networks, which owns the Grid, is ring-fenced from the other ESB businesses.
    The ESB generation and supply companies do not get special treatment from ESB Networks.
    That seperation is not yet complete though.

    They are all part of the ESB group, they share the same board of directors, they share the same pension scheme

    ESB does not sell to Bord Gais at inflated prices.
    They must obey the rules of the SEM, so you are correct.

    ESB's price is not kept inflated. They are, however, not allowed to sell at below cost.
    Why would they wish to sell below cost, the regulator does prevent them from competing on price, while they still have the majority of the market.
    Regards, Pat Gill

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    Dublin Bus passengers numbers are down 12 million over the last 2 years

    Surely a fare increase is on the way

    Public sector economics.

    Can anyone post what state company / public sector charges have fallen in the last 3 years to help us regain competiveness !!!!

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    Waste charges
    Commercial rates
    VHI
    Health levy to Aviva/Quinn
    ESB
    Bus fares
    Train fares
    Petrol
    Diesel
    DPS charge +20%
    A&E fees
    Airport charges
    Vat 2012/2013
    PRTB charges

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