Queensland electricity network to be ‘privatised’, with leases to raise $30bn

QUEENSLAND’S electricity network will effectively be privatised under a move to raise almost $30bn through long-term leases.

QUEENSLAND’S electricity network will effectively be privatised under a Newman government move to raise almost $30 billion through the long-term lease of the state-owned “poles and wires’’.

In a plan that will likely dominate debate in next year’s state election campaign, the government yesterday announced it was abandoning its promise to keep control of the electricity network. The proposal to offer tradeable leases of up to 99 years for the distribution network follows the June budget announcement to sell the state-owned power generators.

Treasurer Tim Nicholls said the government had dropped plans to raise funds through a “hybrid instrument’’ in which the private sector would invest $28bn for a guaranteed income stream but without securing equity. He denied the government was backflipping on its promise not to privatise the electricity sector. “We are looking at 50, 60, 70 years and up to 99 years,’’ he said. “The beauty of that is that we obtain the immediate benefit of being able to receive funds to pay down debt but at same time are able to reassure people that the underlying asset is retained.’’

He said investors preferred the “leasing model’’. The government is hoping to raise $33.6bn from the electricity sales and leases, as well as the lease of the Gladstone and Townsville ports. The plan will be put to the electorate at the next election, due early next year, with $8bn earmarked for infrastructure and the rest to pay down debt.

Opposition Leader Annastacia Palaszczuk said: “The Newman government’s shock announcement that it will engage in the single largest asset sale in Queensland’s history ... is very concerning. It’s another broken promise.’’

Michael McKenna