Treasury Minister - initial response to Scrutiny report on proposed JT sale
Issued by the Treasury and Resources Department
6 March 2007
The Treasury and Resources Minister is encouraged by the overall conclusions of Scrutiny’s Economic Affairs Sub Panel report on the sale of Jersey Telecom.
Senator Terry Le Sueur said that he would respond more fully once he had had an opportunity to study the report in more detail, but an initial assessment led him to agree with the panel that the best telecommunications services for Jersey would be delivered through a combination of competition, regulation and privatisation.
The Minister, who lodged the sale proposition (P28/2007) last month, said he was pleased that the panel was not opposed to privatisation in principle. He agreed with a number of its recommendations and stated that he would be acting on them to ensure privatisation delivers better services and lower prices to consumers and allows Jersey Telecom to thrive in a competitive market.
However, Senator Le Sueur said he thought the report did not seem to reflect the views of a number of crucial stakeholders, including the Jersey Competition and Regulatory Authority (JCRA), which he said had recently clearly stated it has the powers it needs to regulate Jersey's telecom industry.
‘Neither does it seem to have taken account of the considered judgment of Jersey Telecom (JT) itself. The JT Board has publicly stated its support for the sale proposition and advised that it is in the best interests of all Jersey Telecom’s stakeholders.’
The Minister also expressed concern about two areas covered in the report – the sale of a minority share of the company, and the timescale for debate on the sale.
‘I’m not sure what the rationale is for the sale of a minority share. It means that the buyer will have very limited say in the running of the company and I do not believe that we are likely to find any interest from major players in the telecommunications market on this basis.’
‘With regard to putting off the sale, as suggested by the panel, I do not see the point of delaying any further. I agree that we should not rush such an important decision, but this process was started last June and has included advice from leading authorities in the relevant areas and extensive consultation with stakeholders. However, if further assurance is needed, I will ensure that any necessary additional research regarding the implications of the sale of Jersey Telecom is completed before a States debate.’
The Treasury will now go through the report in detail and produce a fuller response to the points it raises. Senator Le Sueur added that he remained convinced his proposition was the right way ahead for Jersey, based as it is, on four key principles:
- Maintaining and improving telecoms provision and competitiveness in Jersey in the interests of consumers and the economy
- Achieving the best foundation for JT’s long-term growth and development
- Safeguarding the rights of Jersey Telecom employees
- Achieving the greatest value for reinvestment of the proceeds into the Strategic Reserve
