Australia: Labor’s NSW power privatisation—a no-lose deal for big investors

[Hannah Bell]

It is little wonder that New South Wales (NSW) Treasurer Eric Roozendaal was able to secure the Australian state’s AAA credit rating last month when he flew to New York to present the Moody’s ratings agency with the details of the $5.3 billion privatisation of part of the state’s electricity network.

The outline of the deal so far revealed before a NSW parliamentary upper house committee inquiry into the sell-off shows that the private investors were not only handed lucrative state assets for a song. They were also provided with substantial concessions, including guarantees against potential multi-million dollar losses. Media reports claim that the proceeds from the sale, after costs, could be as low as $400 million.

Under the deal, rammed through by Roozendaal’s appointees at board meetings of the state-owned power companies a little before midnight on December 14, Origin Energy will pay $3.25 billion for electricity retailers Country Energy and Integral Energy, and the trading rights to the power generation output of Eraring Energy. China’s TRUenergy will pay $2.1 billion for the Energy Australia retail business, plus some Delta trading rights. The state’s power stations, currently managed by state-owned Eraring Energy and Delta West, will remain publicly-owned utilities, for now...

Labor’s determination to secure the sale, even in its dying days, demonstrates that it remains under all conditions the ardent advocate of a pro-market agenda and will continue to serve the interests of big business, in or out of government. Moreover, the federal Gillard government has fully supported the privatisation process.


http://www.wsws.org/articles/2011/jan2011/powe-j28.shtml