[Greens-Media] Tas Greens_Market Was Shunning Tamar Valley Power Station_K Booth MP

[greens at parliament.tas.gov.au]

MARKET WAS SHUNNING TAMAR VALLEY POWER STATION
 
But Bartlett Government Still Paid $100 million

Kim Booth MP
Greens Shadow Energy Spokesperson

Thursday, 30 October 2008
Contact: State Parliamentary Offices of the Tasmanian Greens, (03) 6233
8300

www.tas.greens.org.au


The Tasmanian Greens today called on the Bartlett government to explain
why it rushed ahead and recklessly purchased the Tamar Valley Power
Station from the financially troubled Babcock & Brown, after the
Australian Competition and Consumer Commission (ACCC) revealed that
there was little or no private sector interest in purchasing the power
station. [i]

Greens Shadow Energy spokesperson Kim Booth MP said the actual value of
the Tamar Valley Power Station is still unknown, but the ACCC have made
it clear that the market was giving it little or no value, bringing into
question the $100 million price tag negotiated and paid by the Bartlett
government.

"If the government had showed some restraint and performed due
diligence, there is nothing to say they couldn't have purchased the
station for $10 million, or even $10 - the market weren't going to touch
this stranded asset with a bargepole, so how is it that the Bartlett
government decided to pay $100 million for it?" said Mr Booth.

"In light of the ACCC findings, the government needs to provide full
details of the purchase process, including a proper valuation of the
power station obtained before negotiating the purchase, in order to
actually prove that there is some value for the taxpayer from this $100
million spend." 

"Remember this power station is of questionable value as it is the wrong
frequency for Tasmania's grid."

"Babcock & Brown intended to sell power across Basslink which is DC so
the frequency wouldn't be an issue, but the government claims that it
wants the power for Tasmania so they will now have to correct the
frequency for the Tasmanian grid, with all the attendant losses that
that entails."

"There are also outstanding problems with compatibility with the
Tasmanian grid which will require costly FACS (Frequency Control
Ancillary Services) agreements."

"Who was actually involved in the negotiations prior to this purchase,
when did those negotiations start, and were any commissions, fees, or
other rewards paid to any party as a result of the purchase?"

"Did the government actually seek any independent advice and valuations,
or do any due diligence at all prior to this purchase, or did it rush
ahead and blindly pay $100 million for an asset that the market was
shunning?" 

"Business used to say that buying assets from the state was like
stealing corn from a blind chook, but in this case it looks like selling
to Bartlett Labor is the same thing," said Mr Booth.

[i] "ACCC not to oppose Aurora Energy's acquisition of Tamar Valley
power station project," ACCC Media Release, 29 October 2008,
http://www.accc.gov.au/content/index.phtml/itemId/847392




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