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The NSW Liberal/Nationals’ longstanding concerns surrounding the Iemma Government’s electricity privatisation plans are now being realised, Shadow Minister for Energy Mike Baird said today.
“All along we’ve insisted the Iemma Government’s power sale plans needed to be subject to independent scrutiny, mainly due to the uncertainty around the emissions trading scheme and the current market conditions,” Mr Baird said.
“The growing concern about Friday’s release of the Garnaut report, coupled with issues raised late last week by Fitch Ratings agency* prove the market shares our concerns.
“The price of the State’s electricity assets is likely to be considerably less than the Government’s initial claims of $15 billion and even its downgraded claims of $10 billion.
“The Treasurer has confirmed there are huge write-downs on the NSW generators on the back of the National Emissions Trading Scheme but, strangely enough, he has denied it will reduce the sale price**.
“If Michael Costa has seen valuations falling as a result of the emissions trading scheme then he must be transparent about it.”
Mr Baird said a Fitch Ratings report released last week questioned the Iemma Government’s plans to include an initial public offering (IPO) in the sale.
According to the Fitch Report, “a trade sale can often bring higher proceeds than an IPO because trade bidders can generally extract cost synergies, which are not available without a merger”.
“Clearly this uncertainty around the Iemma Government’s strategy reinforces the value in having the Auditor-General’s input to ensure NSW gets a fair price for the assets,” he said.
“The Auditor-General’s report will shed light on many of the unanswered questions that have emerged from the Iemma Government’s poor handling of their power privatisation agenda,” Mr Baird said.
MEDIA: Lisa Harrington - 0406 726 880
* Fitch Ratings associate director, Janet Willoughby, “[the predominance of coal-fired power stations is something investors] will have to take into account” (Fin Review 27-6-08)
** Australian Financial Review ‘Doubt cast on power sale profits’ 27-6-08
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