THE O’Farrell government will sell the state’s electricity generators, including Hunter power stations that employ hundreds of workers, in an effort to raise about $5billion for infrastructure spending.
But it has ruled out privatising the lucrative electricity networks such as Ausgrid – the poles and wires – that could have raised up to $20billion, according to some estimates.
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The cabinet and the Coalition partyroom made the decision yesterday to sell the Eraring, Delta West, Delta Coastal and Macquarie Generation generators.
That would include the coal-powered Bayswater, Liddell, Munmorah, Eraring and Vales Point power stations and gas-fired Colongra, major employers in the Hunter.
The government would also sell electricity development sites and sell or lease the Cobbora coalmine.
Premier Barry O’Farrell said it would seek to introduce legislation to Parliament next year to enable the sale.
At least a third of the proceeds would be quarantined for spending in regional areas, although the Premier would not give a figure yesterday for the amount the government expected the sale would raise.
The government would guarantee jobs, but could not give any specifics yesterday.
‘They’re the details that will now be worked out by the taskforce that will oversight the sale,’’ Mr O’Farrell said.
The Labor opposition warned the move would push household power bills up by as much as $500 a year, while Unions NSW and the Electrical Trades Union said thousands of industry jobs were in jeopardy and the ramifications would be felt most in Lithgow, the Upper Hunter, and the Central Coast.
It also sparked calls for the Tourism Minister and Nationals MP George Souris to resign because of the government’s ‘‘betrayal’’ of his Upper Hunter electorate after he campaigned on a commitment of no further privatisation of electricity assets.
‘‘Barry O’Farrell is set to slug households more than $550 a year on their electricity bills, an increase many families will be unable to afford,’’ Opposition Leader John Robertson said yesterday. ‘‘The Premier needs to stop and think about the human cost of his power privatisation plans.’’
Nationals leader Andrew Stoner admitted his MPs held differing views on what to do with the state’s power assets. But he said there was ‘‘no daylight’’ between the two Coalition parties. Regional NSW would get at least a third of the sale proceeds, he said.
The NSW Business Chamber backed yesterday’s decision, but said it did not go far enough.
‘‘Without full privatisation of the electricity sector we cannot hope to raise enough funds to improve infrastructure in NSW in any meaningful way,’’ chief executive Stephen Cartwright said.
The decision follows the recent findings of a special commission of inquiry conducted by former judge Brian Tamberlin into the sector’s future that recommended the generators be sold, but left it up to government to consider the fate of the poles and wires.
The Coalition had promised before the election to keep them in public hands, but also to appoint the inquiry.
Mr O’Farrell said yesterday’s announcement was in keeping with the commitment.
‘‘By any measure that is an ambitious reform program and demonstrates our determination to get on with the job of building decent infrastructure in NSW,’’ he said.
But it also puts the government in conflict with its Infrastructure NSW chairman Nick Greiner, who had said a full sale was necessary to fund new roads, rail and other infrastructure.
Muswellbrook mayor Martin Rush said the sale of the Upper Hunter power stations would be a ‘‘terrible betrayal’’ of the community and employees who had worked loyally ‘‘for a combined period of the better part of a century and that loyalty should have been reciprocated by the state’’.
Cr Rush said Mr Souris, formerly a vocal opponent of privatisation, ‘‘should do the honourable thing’’ and resign.
‘‘George committed before the election to me privately, to Unions NSW in a public forum attended by members of the community [in Muswellbrook during the election campaign] that those power stations would be sold over his dead body and that he would resign if his government proceeded to privatise them,’’ Cr Rush said.
Mr Souris said he had a longstanding relationship with electricity workers in his electorate, and that jobs would be protected.
‘‘My affinity remains and my determination to ensure jobs, existing entitlements and their security and their families’ security are upheld and safeguarded remains,’’ he said.
NSW Greens MP John Kaye said the sale would increase power bills and hurt the environment. with AAP