Electricity privatisation battle in SA
By Anthony Benbow
ADELAIDE — For most Adelaide residents "Privatisation stinks" is not a slogan but a literal description. The city suffered the "big pong" for weeks in 1996 following breakdowns at the Bolivar sewerage treatment plant, part of the privatised Engineering and Water Supply Department.
Privatisation was also a big issue in the 1997 election, which returned John Olsen's Liberals as a minority government. If not for his promise to halt further privatisation, particularly of the SA Electricity Trust (ETSA), Olsen would probably have been defeated.
Less than four months later, Olsen announced that the state had an "urgent debt problem" and needed to find billions. ETSA was to be sold, along with the generating company Optima (part of ETSA until 1996) and various other state assets. The resulting billions of dollars of debt repayment would, said Olsen, save $500 million per year which would be used for "job creation".
Olsen's special "advisers" (already paid a hefty fee, they will get lots more in "success" payments if the sale goes through) and Murdoch's Advertiser have campaigned heavily for the sale.
The Spoehr/Quiggin report, however, written by researchers at the University of Adelaide, shows that the expected $5.5 billion sale price for ETSA and Optima will leave the state around $700 million worse off in 10 years' time, compared to public ownership. "ETSA would have to be sold for around $7 billion for there to be any benefit to the taxpayer", the report states.
No financial "benefit" is worth much if services are worse, and this is inevitable if ETSA is privatised, says Bob Donnelly, a Communications, Electrical and Plumbing Union (electrical division) organiser of power industry workers.
Donnelly argues, "Any multinational company as owner will wind back maintenance and services to maximise profit, the assets will deteriorate, and safety and supply continuity problems will result. Also, as the profit motive bites, electricity costs will go up, particularly in the bush, and the government has only guaranteed to cap prices until 2003.
"Since the restructuring started in 1991, nearly 5000 jobs have gone out of this industry. Training has been slashed, only a handful of apprentices are taken on and those that finish are offered only temporary contracts, and no line staff have been trained for about five years. Maintenance is also years behind ... some maintenance is not being done at all, to meet budget targets.
"We currently have some country depots with only one or two workers, and others where all stocks of material have been removed and are supposed to be brought in 'just in time' as needed. This is not working. If the supply fails to a rural centre on a Friday afternoon, will they be waiting until Monday for a crew to arrive and restore it?
"If this privatisation goes through we could be looking at another Auckland."
If ETSA has been so starved of skills, labour and resources while making around $200 million annually ($700 million in 1997), what chance is there of a private operator turning this around, or investing in major new infrastructure?
Olsen's claim — to fast-track the sale — that excess power from NSW and Victoria would cause prices to drop and the assets to devalue has not happened. The Heywood interconnect from Victoria already has no spare capacity, and the government recently scrapped plans for the Riverlink interconnect to NSW. Last summer, ETSA paid huge sums for Victorian energy during peak periods.
Donnelly told 91×ÔÅÄÂÛ̳: "The CEPU is opposed to the privatisation, however, we are still negotiating with the government to make sure the workers rights are protected if it is sold.
"We want the government to guarantee the same conditions as exist now for ETSA workers. At present the government has verbally agreed to a two-year certified agreement, but this is unacceptable. We need guarantees — including of no forced redundancies — that are permanent. More job cuts will only affect the safety of workers and the public. More going out to contract will mean worse conditions and safety standards. If these guarantees are not given, industrial action will result."