Plundering public assets

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Three examples of privatisation in action

Ed Lewis

Electricity. Last week, destructive wind storms swept across Victoria, causing considerable damage and downing power lines, leaving perhaps 300,000 homes without power. Of course, no electricity supplier can avoid damage to their infrastructure as a result of natural events, but Victoria’s private electricity suppliers seem to have had a lot of difficulty coping with an event that reasonable planning should take into account.

Three days later, thousands of homes had still not been reconnected to the power grid and one power worker had died while trying to reconnect wires that were still live.

Electrical Trades Union state secretary Dean Mighell said electricity workers were being asked to risk their lives working on live wires because the electricity faced penalties if they failed to reconnect supplies within a contracted time.

The conservative Kennett government privatised Victoria’s electricity network in the mid-1990s and since then no new generating capacity has been built in the state. Much of the state has suffered blackouts in hot weather since then, because the private power companies say there is no need to provide extra capacity for periods of peak demand, which may be only about 50 hours or less in a year.

Airports. Federal Transport Minister Anthony Albanese has asked the Australian Competition and Consumer Commission to examine car parking fees at privatised airports.

Parking at Sydney Airport, since 2002 majority owned by Macquarie Airports, which is linked to Macquarie Bank, is about twice as expensive as JFK airport in New York and Heathrow in London. The airport owner has a monopoly on parking at the airport and took $70 million in revenue from parking last year.

Grain freight. About six years ago, the NSW government privatised Freightcorp, the body repsonsible for moving grain crops by rail. The organisation was sold to Pacific National, which agreed to continue providing grain freight services.

The agreement under which Freightcorp was sold expired in November, and now Pacific National says transporting export grain is unprofitable and it will no longer provide the service, leaving farmers throughout NSW with no alternative but road transport, which will put probably another 200,000 trucks on the state’s already overcrowded roads, and more particularly add more vehicles to the already long queues at the state’s ports. Pacific National was given a discount of $118 million on the sale price to continue moving grain.

Greens MP Lee Rhiannon has moved in parliament for an emergency rail response plan to provide facilities to move the freight crop and the NSW Farmers Federation has backed the move.

We’re told that privatisation provides services more efficiently. There doesn’t seem to anything very efficient in withdrawing an essential service such as grain freight, or in operating a power network on a shoestring and being unprepared for natural weather events. It could be said, however, that Macquarie Airports is very efficiently ripping off airport users, so perhaps that’s what efficiency really means in the language of privatisers.

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One Response to “Plundering public assets”

  1. douglas jordan Says:

    You should add Victoria’s public transport to the list. It is now about 9 years since the entire system was handed over to the private system. A fair time to make a judgement on the result. In simple terms it has been little short of disaster.

    The original decision was made in part by Kennett as a payback for the decision of public transport workers to take strike action during the first Grand Prix. We are promised all kinds of improvements would follow as the private system could ran the system so much better. The reverse is true.

    We have already seen one of the original operators pull out. In order to make the system more attractive to the new owners large numbers of staff were retrenched. In particular,this included tram conductors and station staff. They were replaced by heavy handed ticket inspectors who appear driven to treat passengers without tickets as criminals who deserve to be fined. We now have a massive problem with overcrowding and the Government claims little can be done about it for years. In the meantime passengers will have to grin and bear it.

    In opposition Labor promised to take the system back into public hands. This was dumped once they got elected. When National Express pulled out a couple of years ago, the Government had the opportunity to take the system back at no cost. They passed. Transport Minister Kosky has said she has no desire to run a transport system and acts on this view. The sad reality is that the main transport unions seem content to deal with private owners rather than government ones.

    I believe there is a growing anger in the community about the situation. Last year there was a meeting of several hundred people that demanded the Government take over the system. Last week’s release of the Eddington report which called for yet another freeway link — with little in the way of meaningful public spending is already sparking outrage. Hopefully we might see a signiifcant movement emerge that can put pressure on the government.

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