Powerless: electricity sale stalls
ANDREW CLENNELL AND BRIAN ROBINS, SMH
February 19, 2010
THE state government has delayed the sale of its electricity retail assets, raising questions as to whether the sale will proceed at all before the election next year.
A day after the Herald revealed the government would defer construction of the metro system, in effect meaning the project is doomed, another key project has been postponed.
''The state is stalled,'' said the opposition treasury spokesman, Mike Baird.
''We have full-on paralysis.''
The Treasurer, Eric Roozendaal, announced the deferral of the $5 billion-$10 billion proposed sale of EnergyAustralia, Integral Energy and Country Energy, and electricity trading rights yesterday.
Mr Roozendaal said the sale, first proposed by the premier Morris Iemma in 2007, would be complete by the end of the year, but there was widespread scepticism about this in political and industry circles yesterday.
Sources said the complexity of the government's sale proposal had put off banks and electricity companies alike. Credit ratings agencies had warned that failure to privatise electricity could jeopardise the state's triple A credit rating.
The former finance minister Joe Tripodi, who spent $300,000 on an around-the-world trip to spruik the sale, came up with the complex Gen-Trader model, under which generation trading rights would be sold in a virtual stock exchange with the retailers.
One industry source said: ''There have been issues with getting private sector confidence in the Gen-Trader model. I know we had a lot of trouble getting our head around it.''
After Mr Roozendaal's statement yesterday, potential buyers threatened to walk away. A spokesman for Origin Energy said it would ''consider other, competing, investment options''.
Mr Roozendaal is hiring the former head of the department of premier and cabinet Col Gellatly, another former senior public servant, John Dermody, and the former minister Kim Yeadon to help the sale through, the Herald has learnt.
Do you know more? contact@smh.com.au
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- Dear Fellow Bloggers, For some time I have thought about starting a left of centre news and commentary service and I have tried to do this by using email. But as some good, but email overloaded friends have suggested, a better way to go may be by blogging. So here it is! Jenny's Red News. My primary interests are left of centre politics and the very important question of how can we get left of centre parties, groups and grouplets in Australia working together more co-operatively. The right of centre predominates politics in this country at the present time, and they are on the march. We on the left of centre need to work together more co-operatively and constructively to put the left of centre agenda out there, for the perusal and consumption of the Australian people. Particular topics that will be reported on and on which comments are welcome are: Industrial relations - Opposition to Workchoices Refugee and Asylum Seekers Human Rights Civil Liberties Opposition to the Welfare to Work Changes Health System Reform Aboriginal Health and Reconciliation Jenny Haines posted by JENNY'S RED NEWS at 12:50 AM 0 comments