Power company collapse shows need for inquiry

Thursday, 12 December 2002

A full inquiry into all of the State's electricity supply deals is urgently needed following the collapse of Flinders Osborne Trading, according to the Executive Director of the University of Adelaide's Centre for Labour Research, Mr John Spoehr.

The author of Power Politics - privatisation of the electricity industry and the public interest, Mr Spoehr is regarded as one of the State's leading independent commentators on the issue of electricity privatisation.

He says while he is not surprised of the collapse of Flinders Osborne Trading, exposing taxpayers to a debt of up to $140 million, it is important that the State Government acts quickly to minimise any further financial damage it could be liable to.

"As far back as 1998 I, along with Professor John Quiggin (from the University of Queensland), had conducted research which clearly highlighted the risks associated with privatisation of South Australia's electricity assets, so it's no great shock to me that we now have the problems associated with Flinders Osborne Trading," he says.

"What this demonstrates is the need for a full and systematic inquiry into the deals that have been struck, not just with NRG but all the companies that have been involved with the privatisation of ETSA.

"Such an inquiry is vital because it would help to minimise any further financial difficulties we may unwittingly be heading for, and avoid a repeat of the Flinders Osborne Trading debacle."

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