An inquiry into the partial privatisation of NSW’s electricity sector by the ousted Keneally Labor Government has recommended further sale or lease of generators, the possible sale of ‘poles and wires’ distribution networks and the sale of power station development sites.

 

In his 361-page report, former Federal Court judge Brian Tamberlin, QC, found that Labor government’s $5.3 billion transaction, under which Origin Energy and TRUenergy aquired the rights to trade the electricity generated by state-owned Eraring and Delta West, was “a second-best option”.

 

“The sale of the generation trading right was not expected to, and probably did not, achieve the consideration that the sale of the generators would have been expected to receive,” he said. However, he concluded that the sale, which was completed in March this year just prior to the election and included Country Energy, Integral Energy and Energy Australia, had delivered value for money.

 

The report's recommendations include:

  • Legislation be enacted to enable the sale or long term lease of the Eraring, Delta West, Delta Coastal and Macquarie Generation generators;
  • The development sites be sold by the Government;
  • The Government sell the Cobbora mine;
  • The Government determine its objectives for the network businesses and determine whether they should remain in public ownership or be sold in part or in full; and,
  • The Government obtain expert advice on the timing and implementation of the recommendations – given there are several reviews to be finalised in 2012 which may affect the value of the network businesses.

 

NSW Premier Barry O’Farrell said that his government would consider the recommendations and make a determination before Christmas.

 

He said the inquiry found the sale and legal processes were reasonable and appropriate.

 

"What was not appropriate was the way this sale was done in a late night deal with Parliament shut down to avoid any scrutiny," Mr O'Farrell said.

 

"The people of NSW passed their own judgement on that process adopted by the former Labor Government at the election in March this year."

 

The Report can be viewed here.