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NSW government approves electricity poles and wires sell-off to private sector NSW government approves electricity poles and wires sell-off to private sector
(about 2 hours later)
The NSW government has approved the multi-billion-dollar partial sale of its electricity network assets and will take the controversial policy to the next election. Sydney will get a second harbour rail crossing, power prices will be discounted and billions will be pumped into roads, schools and hospitals under the NSW government's controversial plan to sell electricity networks.
Coalition MPs agreed to privatise 49 per cent of the poles and wires assets on 99-year leases, with proceeds of up to $20 billion to be spent on major infrastructure projects, possibly including a second Sydney Harbour rail crossing. But the bold promises may not be enough to woo jaded voters, with the premier, Mike Baird, anticipating a backlash amid fears of rocketing power bills and public sector job cuts.
A major split within the Coalition forced the premier, Mike Baird, to exempt country-based Essential Energy from the sale, with the Nationals vehemently opposed to it being privatised. "It may not be popular in parts, indeed it definitely isn't popular in parts," Baird said, "but I am determined to do what's right."
The Nationals also demanded a number of other guarantees surrounding the sell-off, including protection for workers in the power sector. Forty nine per cent of the state's poles and wires will be sold on 99-year leases under a policy approved by Liberal and Nationals MPs following heated party room meetings on Tuesday.
The 49 per cent sale was approved by cabinet after Liberal and Nationals party room meetings on Tuesday. The Coalition will take the sale to the March 2015 election and if it wins approval, Baird said he anticipates the transaction being completed by the end of 2016.
The finer details of the sale are expected to be announced within weeks.
Detailed plans for the infrastructure projects are expected to be outlined by November.
Baird was unable to offer any firm dates for when the infrastructure would get built, but said it was part of a 10-year plan.
A second harbour rail crossing is expected to be created, extending the North West Rail Link through the CBD and on to Bankstown.
At least $6 billion of the sale proceeds would be spent in regional NSW, including roads funding, and $2 billion would go to schools and hospitals.
Electricity network prices would also be discounted by one percentage point off the forecast regulated rates until 2019 under the plan, though it remains unclear how much of that would be passed onto the consumer.
The sale was approved despite a major Coalition split, with the Nationals forcing Baird to exempt country-based Essential Energy, amid fears it would cost hundreds of jobs in regional NSW.
The opposition leader, John Robertson, said the sell-off could lead to public sector job cuts and tax rises after the government loses annual dividends from the assets, which last financial year totalled $1.7 billion.
"This is not a magic pudding, you can't sell an asset that delivers an income ... and not have an impact on frontline services," he added.
Unions believe privatisation will lead to higher power bills.
Unions NSW chief Mark Lennon said the proposal would cost the Coalition when voters head to the polls in March.
NSW currently has four state-owned energy corporations that distribute electricity across the state – TransGrid, Essential Energy, Ausgrid and Endeavour Energy.NSW currently has four state-owned energy corporations that distribute electricity across the state – TransGrid, Essential Energy, Ausgrid and Endeavour Energy.