Business Management

Privatisations more about getting re-elected than good management.
It”s called ‘financial management’.

The facts are that the six state-owned electricity agencies slated for privatisation reported earnings of $1.5 billion in 2006-07 (and paid $1.3 billion to the state budget). That”s a rate of return of more than 25 per cent per annum.

Granted that includes the ‘poles and wires’ businesses, but audited accounts don”t report separate results of those segments, contrary to accounting standards.

The bottom line is that any funding of additional generating capacity should be regarded not as a ‘cost’ but as a money-spinning ‘investment’.

Iemma”s own Owen Report, while saying that the state may need one more base load station by 2014, never claimed that $15billion was needed to avoid brown-outs. The cost of one new station is about $3 billion.