Firm touts sale of Snowy Hydro

Canberra Times
Friday 11/7/2008 Page: 6

Snowy Hydro is urging local communities to rethink their strong opposition to privatising the Snowy Mountains hydro-electricity scheme, saying it remains "the most sensible" option for its future. The company is distributing 10,000 copies of a corporate DVD to homes and businesses across the Monaro and Snowy Mountains regions, arguing a case for the benefits of future privatisation.

NSW Treasurer Michael Costa is also pushing for Snowy Hydro to be privatised, telling a recent public meeting in Cooma the company is losing its business value and "could be in trouble in a few years' time." Mr Costa also told the meeting the proposed $3 billion sale of the company in 2006 "was blown" by ill informed opposition to the NSW Government's proposal to sell-off the Snowy scheme to private investors. In a recent community newsletter, Snowy Hydro chief executive Terry Charlton said he hoped Mr Costa's "blunt but correct comments will now serve as a wake-tip call to all."

Mr Charlton said failure to privatise the Cooma-based hydroelectricity generator in 2006 "was then, and continues to be today, detrimental to the long-term future of the company" Speculation over the future of Snowy Hydro has been renewed following suggestions in the draft Garnaut climate change review that its continuing public ownership by three governments - NSW, Victoria and the Commonwealth - could restrict competitiveness in the national electricity market.

Labor sources have told The Canberra Times that before last year's federal election, members of the Labor Opposition investigated the possibility of a federal takeover of the Snowy and subsequently leasing it to a private operator. Any further plans are on hold until conflict over the NSW Government's sale of the state's electricity industry is resolved. Member for Eden-Monaro and parliamentary secretary for defence Mike Kelly said he remained "passionately opposed'' to privatising the Snowy and was "adamant that abandoning its sale was the right thing to do."

The sale of the Snowy scheme in 2006 was supported by state Labor governments in NSW and Victoria, but collapsed when the Howard government refused to sell its 13 per cent stake in the scheme. A NSW parliamentary inquiry into continued public ownership of Snowy Hydro concluded "if more information had been provided to the community prior to and during the proposed sale", community concerns and opposition could have been reduced.

A former Snowy Hydro chief engineer, Max Talbot, said local communities were concerned state and federal governments were ''gearing tip for a privatisation-by-stealth campaign. "Why was the sale of the Snowy raised in the Garnaut report?" he said. "My view is that it's opening the door for a sale to be considered as ultimately beneficial and unavoidable within the context of climate change."