thegoodoil.org/?p=7550 WA Labor’s call for a public investigation into the decision to refurbish the Muja coal-fired power station is in the interest of both the tax-payer and Barnett Government. Quite simply, everyone – including the Premier and current Minister – agrees that the cost blowout is both large and unacceptable. Because of this consensus, that doesn’t need scrutiny (although the precise dollar value of the blowout is yet to be agreed). However, the Minister’s decision to openly blame Verve Energy for the mistake has created a conundrum for this and future Governments, that if not openly investigated, will create an unacceptable new precedent in Ministerial accountability. Let’s re-visit the facts – and in doing so, I’m sure the long term problem will become self evident: 1. The Minister who agreed to the flawed proposal to refurbish the power plant apparently did so on the back of advice from Verve Energy 2. That Minister, on behalf of the Government, was Verve’s only shareholder as well as its ultimate decision-maker and financier 3. As a corporation, Verve is legally obliged to act only in its commercial interest Other private providers of power generation (i.e. competitors to Verve) were openly lobbying for Government assistance to develop their infrastructure 4. The Minister also had oversight of a separate department (the Office of Energy) that was intended to provide advice to the Minister on policy matters, removing the potential for conflicts of interest where a decision could commercially benefit or disadvantage one of the corporatised “Government Trading Enterprises”. 5. The Office of Energy has since been dissolved and rolled in to the Department of Finance. 6. The former Minister changed the leadership of the Office of Energy in controversial circumstances several times during his term. 7. The CEO of Verve resigned without explanation under the former Minister’s watch 8. The former Minister changed his chief advisor more than once for every year of his term. 9. The current Minister has openly blamed Verve for providing flawed advice So to our mind, the questions that arise – and make a public inquiry absolutely necessary – include: - Why was the decision to fund the refurbishment made on the back of advice from Verve (which is obliged to operate in the interests of profit, not the public) rather than the government department that was explicitly established to provide impartial advice? - Is it a conflict of interest for commercially focused Government Trading Enterprises to be making the decisions on how to spend hundreds of millions of dollars of tax-payer’s money on infrastructure that they will own and operate? - If the Office of Energy supported with Verve’s advice, why isn’t the current Minister blaming the former Minister’s department? - Now that the single shareholder of Verve has blamed it for the blowout, will due regard be given to the Corporation’s ASIC obligations (commercial imperative) while it is forced to fix the political problem by not passing on its costs to the public? - Did the high staff turnover in the Minister’s portfolio area result in him not having access to impartial advice – thus forcing him to side with Verve? Hmmm. Someone said to us on the weekend that this story has a long way to go – it seems that might be an understatement.
Posted on: Mon, 24 Jun 2013 02:22:47 +0000
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