Electricity sale by end of 2009
Brian Robins, smh
November 19, 2008
The NSW Government hopes to finalise the sale of the state's electricity assets by the end of 2009, after it was forced to abort plans to sell the electricity generators earlier this year.
Under its revamped plan, the Government hopes to sell the electricity retailers - EnergyAustralia, Integral Energy and Country Energy - along with development sites for power stations, and also trading rights from the generators.
The outgoing Treasury Secretary, Mr John Pierce, said yesterday the sales strategy for the assets to be sold would be finalised within three to four weeks, and the full sales strategy finalised by February or March. The sales were to be completed by the end of next year.
Because of the recent turmoil in financial markets, financing approaches had changed, he said, and bidders would use more equity and less borrowings to fund any purchases. There would be a "greater focus on risk, and the due diligence process is longer".
Even though the electricity market trading rights of the power generators will be sold, the Government will still be exposed to the significant risks attached to volatile wholesale electricity prices.
"It does not remove from the state all of the risk," Mr Pierce told a parliamentary inquiry yesterday, while the private investors buying the risk would gain significant influence over the operations of the power stations, even though they would remain in government hands.
The Greens MP John Kaye claimed the sale of the trading rights would give the buyers significant sway over the activities of the state-owned generators.
"The state will be left owning a shell as all key decisions regarding the management of the state's publicly owned power stations are determined by the successful tenderer for the generator trading rights," Mr Kaye said yesterday.
He said this was the same as the Iemma-Costa government's earlier plans to "lease" the generators to private buyers.
Mr Pierce conceded the sale of the electricity trading rights, together with electricity retailers and development sites at power stations was "the next best option" for the government-owned power assets, after the earlier plans to sell the power generators collapsed.