Federal and NSW governments withdraw Snowy Hydro shares

Friday, June 2, 2006

The Australian federal and New South Wales governments will not be selling their shares in Snowy Hydro Limited (the owner and operator of the Snowy Mountains Hydro-Electric Scheme). Snowy Hydro Limited’s major shareholder is the NSW government with a 58 percent shareholding. The Victorian government owns 29 percent and the federal government has a 13 percent stake.

NSW Premier Morris Iemma announced in December 2005 that he wished to sell the state’s share in Snowy Hydro that caused the federal and Victorian governments to follow.

The proposed sale has attracted immense criticism by those who believed that the sale would affect the environment and water supplies along the Snowy River, this was reinforced yesterday when 58 eminent Australians presented a petition to the government opposing the sale.

Prime Minister John Howard announced today that the federal government would not be selling its 13 percent share of Snowy Hydro following what he calls “intense community reaction”. In a statement, Mr Howard said, “This decision to sell the Snowy Hydro has created significant unhappiness, concern and unrest throughout the Australian community.”

Mr Howard said that the sale was not an election promise by his government and that the federal government failed to see any long-term benefits from the sale. He also said that the government needed to “safeguard the interests of all those dependent on Australia’s iconic water resources”.

The federal government has however stated that despite refusing to sell its share in Snowy Hydro that it will not be purchasing additional shares if NSW and Victoria push ahead with the sale of their shareholdings.

Despite telling Macquarie Radio earlier this morning that his government would be pushing ahead with the sale as it was in the best “interests of NSW”, Premier Iemma announced shortly after Mr Howard’s release, that the NSW government would be withdrawing its shares from sale.

Mr Iemma conceded that the sale would be extremely difficult with the federal government withdrawing its 13 percent from sale. “The Prime Minister has pulled the rug out from under the sale,” Mr Iemma said. “The circumstances are significantly changed.”

“The Commonwealth decision makes it extremely difficult for NSW to proceed,” he conceded.

Victoria is yet to announce whether or not it will be withdrawing its shares from sale.

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