CRASH OR CRASH THROUGH IEMMA

Iemma vows to crash through

By Linda Silmalis, Sunday Telegraph

March 23, 2008 12:00am

NSW Premier Morris Iemma is set to go down in history as the first Labor leader in NSW to defy the wishes of the party.

While union and senior party officials remain hopeful the premier will back down on his plan to privatise energy ahead of the ALP state conference, Mr Iemma has stated in no uncertain terms that he plans to ignore the views of party delegates.

In an interview with The Sunday Telegraph to mark his first anniversary as elected premier, Mr Iemma said work had already begun on the legislative framework to allow for the privatisation.

"It's the right decision for the state,'' he said.

"The Cabinet and the Caucus have endorsed the Government's package.

The package will be implemented.''

The view is set to further tear apart the party, which has endured one of its rockiest rides since Mr Iemma led Labor to victory on March 24, including controversies involving some of his ministers and the still unfolding health crisis.

However, the greatest challenge for Mr Iemma will be at the March 3-4 ALP state conference, where a vote on energy privatisation will take place.

Mr Iemma maintains the plan is about securing the state's future energy supplies. He argues that MPs voted for the move at Cabinet and in Caucus.

However, many NSW MPs claim they were not aware the policy would not result in additional energy.

The policy entails the sale of the retail arms of EnergyAustralia, Integral Energy, Country Energy and the long-term lease of generators.

Mr Iemma believes removing the Government from the state's electricity industry will create the right market conditions for the private sector to become involved and invest in a new _ necessary _ base load generator.

However, some NSW MPs fear the Government could be left with egg on its face if the private sector does not come on board within two years. It is understood there has also been discussions within the State Government of funding a generator of last resort if this scenario eventuates.

"The reason Caucus endorsed it was that Morris made an argument that we were going to run out of energy supplies if we didn't do something about it,'' one MP said.

"What he didn't say was that this policy does not deliver one extra kilowatt of energy.

"All it does is set up the right conditions so that the private sector will be enticed to get involved and invest in new base load generation.

"But just because we bail out of the market, it does not mean the private sector will necessarily come on board and we could be left with the embarrassing situation of being forced to fund it ourselves on the eve of the next election.''

It is understood ALP general secretary Karl Bitar is desperate to resolve the issue to avoid a showdown at the conference.

However, negotiations between the unions and Treasurer Michael Costa, who has driven the policy, have all but stalled.

More than 900 delegates will attend the conference where a vote will be taken on the sale.

NSW MPs are under pressure from their branches to cross the floor in State Parliament if Mr Iemma proceeds with the contentious legislation.

At least 15 MPs have publicly come forward opposing the sale.

One MP told The Sunday Telegraph that MPs are angry at Mr Iemma for making them choose between him and the party.

"The backbenchers are pretty s****y that Morris is making them choose between their loyalties to him and their loyalties to the party,' the MP said.