'Privatisation by stealth': Nalder lines up Wyatt over energy asset sale
The WA opposition has accused the state government of breaking an election promise to "stop privatisation" after it sold three renewable energy assets to a Dutch investment firm and a union superannuation fund.
The sale of a wind farm in Warradarge (about 250 kilometres north of Perth), an Albany wind farm and the Greenough River Solar Farm last year to a joint venture called Bright Energy Investments sparked a political row in a parliamentary budget scutiny committee hearing last week.
Shadow Energy Minister Dean Nalder said the deal was "privatisation by stealth" and lacked transparency.
But Energy Minister Ben Wyatt said the government had netted $17.6 million from the sale of the 10-megawatt Greenough River Solar Farm, along with the right to develop a 30-megawatt expansion.
A price for the new 180-megawatt wind farm in Warradarge and the 18-turbine Albany wind farm, which has the capacity to provide Albany with 80 per cent of its power, is still being negotiated by the government.
The Bright Energy joint venture is owned by the Dutch Investment Fund and Cbus, with the government retaining a 20 per cent stake.
"I believe there is a responsibility to the taxpayer to ensure that they're getting the best possible deal," Mr Nalder said.
"We know that a private equity company needs to deliver a rate of return and have a higher cost of capital than what the state would potentially have and, therefore, you question what are the financial arrangements that make it beneficial for the state."
Mr Nalder said the McGowan Government had failed to reassure taxpayers the deal was in the state's best interests.
"There is no public tender process to ensure that we're getting the best arrangement for the sale or privatisation," he said.
My Wyatt had refused to divulge the sale price of the assets in the parliamentary estimates committee hearing on the basis the information was commercial-in-confidence, but subsequently reversed this position.
He rejected Mr Nalder's assertion the government had broken a promise to stop privatisation and said the opposition had a "twisted memory" of the election.
"The McGowan Government had a clear policy ahead of the election and one that it remains committed to," he said.
"As per our election commitment, the McGowan Government will not privatise Western Power or Fremantle Port.
"This was a clear distinction at the election, one that we have continued to reaffirm since the election."
This is despite a pre-election Labor "fighting platform" which said: "WA Labor will stop privatisation".
"WA Labor recognises that selling your assets is a short term fix, not a long term plan," the document said.
"WA Labor will stop the privatisation of existing public sector services and where possible and economically beneficial to do so bring services back into the public sector."
My Wyatt said the sale of renewable energy assets helped the state meet its commitment to produce 33,000 gigawatt hours of renewable energy by 2020.
"In order to fulfil our obligations to the federal government, Synergy could either outsource the state’s responsibility to the private sector and have no control, or Synergy could go into a joint venture with the private sector and maintain some control over the asset," he said.
"It chose to do the latter. Which means that at the end of the process, the state has increased the size of its portfolio of renewable assets."
The Liberal party is yet to formulate a policy on the privatisation of state assets ahead of the 2021 state election, but had promised to sell 51 per cent of Western Power before losing office last year, a policy which some say contributed to its defeat.