Experts yesterday derided Daniel Andrews’ thought bubble of an idea to revive the SEC.
At the AFR’s Infrastructure Summit it was criticised as “very unwise” and almost impossible to make work in practice because investors holding a 49 per cent stake would want a return.
Mr Andrews has said "any profits that are generated by the majority government's ownership... will be reinvested in more power, in the infrastructure that we need, in making sure that less is passed on to consumers by way of cost”.
The CEO of toll road developer Atlas Arteria, Graeme Bevans, said private investors taking a minority shareholding will demand a commercial return on those funds.
“Private equity demands a return”, he said, which undermines Mr Andrews’ idea of ploughing profits back into his power plan boondoggle.
Mr Bevans succinctly went for the jugular of Mr Andrews’ ill-conceived idea stating unequivocally “people do not trust government to act in a commercially appropriate way”.
As to lowering electricity prices, well, “it’s going to be almost impossible”.
“And so, unless the government’s going to provide a power purchase agreement that makes those economics work, it’s going to be very difficult for the Victorian government to use it as a tool to lower power prices”.
As to the $1.9 billion cost of the thought bubble, Tony Shepherd, a director of Snowy Hydro cast serious doubt on it.
“Big complicated new projects quite often will have cost blowout, as they call it or what have you, because of the complexity of them”.
Given the record $30 billion in cost blowouts under Daniel Andrews’ Big Build there is no doubt Mr Andrews will have to rack up even more debt.
The only guarantee is that electricity prices won’t fall and that the cost of the project will blow out.
David Southwick MP
Shadow Minister for Energy and Renewables