Tuesday, March 1, 2011

the Hazelwood deal - looked good at the time

The cost of closing Hazelwood - Australia's dirtiest coal plant - would cost $3.8 billion. It's current value is $2.5 billion and the Kennett government and was purchased from the Victorian government for $2.35 billion.

We as Victorians made a huge windfall profit when Kennett, cleverly sold the 30 year old Hazelwood in 1996 (offering a 40 year life) for far more than it was listed at on the government books. And we have been paying for it every since. The station was due to be shut down in 2005 by the SECV.

The station has to be kept going to deliver its owners (which interestingly includes the CBA) a profit, so the government keeps agreeing to new extensions of the terms. The government is driven by fear of driving investment away.

The privatization of electricity, when we are trying to cut carbon emissions, looks daft.

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