SA: Independent rejects power asset lease plan

AAP General News (Australia)
12-08-1998
SA: Independent rejects power asset lease plan

By Valkerie Mangnall

ADELAIDE, Dec 8 AAP - The South Australian governments proposed lease of its power assets
hit a wall today with independent state MP Nick Xenophon announcing he would not support the
plan.

The vote of the independent upper house member was crucial for government legislation on
the leasing to be passed.

"I have seriously looked at the governments current proposal of an initial 25 year lease
with three 24 year extensions where the extensions are to be ratified by the parliament after
the next election," he said.

"In theory, this proposal gives a measure of choice for South Australians. However, I have
come to the conclusion that the choice is illusory both in the commercial and political
context.

"In the circumstances, I have no choice but to reject the governments current lease
proposal."

The SA government last month announced it would not push ahead with its plan to sell the
power utilities ETSA Corporation and Optima Energy, instead opting for an initial 25-year
lease followed by an option of a further three 24-year leases after the next state election in
2001.

Mr Xenophon said the state governments approach to the proposed Riverlink interconnector
with New South Wales, which would sell excess power to SA, had been a significant factor in
his decision.

The SA government originally supported the Riverlink plan, but reversed its decision after
it announced plans to sell the states power assets and has decided to build a new power
station at Pelican Point in SA.

Mr Xenophon had said he was concerned the rejection of Riverlink could disadvantage SAs
power consumers.

On Friday, the government said it was prepared to support Riverlink as long as its NSW
proponents agreed to bear the risk of its financial viability and that the Pelican Point power
station would go ahead.

But Mr Xenophon today said: "The governments purported compromise on Riverlink last Friday
- to nominally support it as an unregulated asset, but to say nothing about the long term
fixed price contracts for the proposed Pelican Point generator - verges on the disingenuous,"
he said.

Mr Xenophons announcement drew an angry response from the government, with SA Premier John
Olsen saying the move left the government with three choices - to cut essential services,
raise taxes and charges or run the budget at a deficit.

"None of those choices are the right choice for South Australia, none of them are
palatable, none of them are acceptable," Mr Olsen told reporters.

"Mr Xenophon has abdicated his responsibility to South Australia and its future."

But the state opposition today welcomed Mr Xenophons announcement.

Opposition leader Mike Rann said the governments failure to win Mr Xenophons support,
combined with the threat of a possible inquiry to be launched into the governments dealings
with communications company Motorola on a separate issue, threatened Mr Olsens leadership.

"Mr Olsen now faces real problems," Mr Rann said.

"John Olsen staked his political future and leadership first on the sale of ETSA, then on
the lease of ETSA. Thus far he has been defeated on both counts.

"His leadership is under intense scrutiny, with the Motorola inquiry around the corner."

AAP vm/kr

KEYWORD: POWER SA NIGHTLEAD

1998 AAP Information Services Pty Limited (AAP) or its Licensors.