Emergency diesel generators set to cost taxpayers $610m
THE full cost of South Australia’s emergency diesel generators — purchased under a deal signed by the former Labor Government — has been revealed by a special investigator.
- Special investigator looks into diesel generator deal
- Former Labor Government signs contract to purchase generators
SOUTH Australia’s emergency diesel generators are likely to cost taxpayers $610 million under a deal signed by the former Labor Government, a special investigator had found.
A report from senior silk Mark Livesey was tabled in Parliament on Tuesday.
It had been six months in the making and his appointment to investigate the deal was one of the first actions taken by the new government.
Mr Livesey was asked to examine the impacts of former premier Jay Weatherill’s decision to buy the nine generators rather than lease.
Dan van Holst Pellekaan on Tuesday told Parliament the report had exposed a huge blowout in the estimated cost revealed before the election, and was a “damning indictment”.
He said the Government would keep the generators in place this summer, when experts predict the state faces a one-in-10 chance of needing them to avoid forced blackouts.
After that, the Government will go to market seeking a new private operator.
Mr van Holst Pellekaan told Parliament the Government would offer a 25-year lease.
“In all likelihood, these generators will not be needed for emergencies,” he told Parliament.
“By leasing them for 25 years, they can help deliver more affordable and reliable power.”
Mr Livesey found the likely cost of purchase to be $494.5 million. That comes in addition to the initial lease costs for 13 months of around $115 million, bringing the total of $609.5 million.
In his investigation, he found it was “difficult to determine the concrete advantage associated with exercising the option early”, by rapidly switching a short-term lease to outright purchase.
Mr van Holst Pellekaan told Parliament Labor did so for political gain.
“Labor were happy to let these generators sit idle and inflict unnecessary financial pain on South Australians while they continued to play politics with people’s electricity bills,” he said.
“This report is a sobering read, and a damning indictment.
“It exposes how, seemingly without any expert advice, Labor rushed into owning permanent generators at huge expense.”
Opposition energy spokesman and former minister Tom Koutsantonis tweeted: “Privatisation plan by (Premier) Steven Marshall now includes privatising the state-owned generators.”
“The state will now be at the mercy of the private sector thanks to the Liberals,” he said.
“Another broken promise just like ETSA.”