Keneally set to lose power
In another blow to the Keneally Government in the run up to the March election, an upper house inquiry took place last week to determine the details of the controversial $5.3 billion sale of state owned energy assets. Coalition and Greens MPs questioned the mass resignation of eight board members from Eraring Energy and Delta Electricity on the night of the sale and whether the transaction would result in higher electricity bills for the people of NSW.
After admitting that she “underestimated” public interest in the Government’s energy reform process, Premier Kristina Keneally agreed to give evidence at the inquiry with Treasurer Eric Roozendaal. However, the legal status of the proceedings remained uncertain after the Premier sought advice from the Crown Solicitor that witnesses would not be given parliamentary protection, although this was contradicted by the clerk of the parliament, Lynn Lovelock. None of the former board members appeared on either day.
Challenging the Government’s promise that the privatisation of the state’s assets would increase competition and introduce at least one new market player to the energy sector, the Gentrader transaction was dominated by just two power giants, Hong Kong based TRUenergy and Origin Energy.
The Keneally Government’s price on privatisation is also comparatively small to that put forth by the Carr government in 1997 who valued the industry at approximately $30 billion. It is also roughly half of the $10 billion preferred by the Iemma government in 2008. This stands at odds with Treasurer Eric Roozendaal’s insistence that the deal would guarantee a “strong financial return” for the taxpayers of NSW.
“Thirteen years ago (the Carr government) could have got a much larger amount which would have been invested in the state. It was a missed opportunity and now the government has undervalued the assets,” said a spokesperson for the NSW Business Chamber. “The Gentrader model is also unnecessarily complex.”
Greens NSW MP John Kaye also believes the deal to be a threat to the environment.
“It weakens the state’s ability to respond to climate change,” said Mr Kaye. “The government has signed up to a deal that underwrites the cost of coal. The state has also lost control over power stations that are contributors to green house gas emissions. They have handed over highly polluting power stations to private corporations that will only operate them harder to produce more energy and more profits.”
The online database Carbon Monitoring for Action revealed that Eraring power station, purchased by Origin Energy, emits 19,800,000 tons of CO2 each year.
BY MILLY CAFFREY
