The government has insisted it is continuing to move ahead with the plan to merge Energex and Ergon. Photo: FairfaxDeputy Premier Jackie Trad has dismissed reports the government is considering abandoning its plans to merge the state’s power assets.
Fairfax Media reported on Thursday senior sources had advised the government was planning to scrap its election commitment to merge power generating companies as part of its plan to save $150 million a year.*
The Australian Competition and Consumer Commission raised red flags over the proposed mergers almost immediately, given the companies already have a 60 per cent share of the Queensland electricity market.
The government has insisted it is continuing to move ahead with the plan, despite having found savings elsewhere, by taking money out of super funds and increasing the government dividend to bolster the state’s coffers.
Ms Trad stuck to the government line on Thursday, despite increased grumblings the plan is dead in the water.
“In terms of the GOC merger we made a commitment to the people of Queensland that we would merger the power companies in order to find efficiencies, particularly around administration and marketing,” she said.
“We know that in terms of achieving those efficiencies we can find savings and we can keep paying down debt, which was our commitment to the people of Queensland, and we will deliver on that commitment.”
Energy Minister Mark Bailey, speaking from Mackay, also denied the merger was off the table, but said there were “a number of different ways you can do a merger process” and the government was looking at all of them.
“We made a very clear commitment that we wanted to merge some of our companies to gain efficiencies,” he said.
“We always said, even 12 months ago it would be subject to competition being protected and consultation with the ACCC, we are committed to that and working our way steadily through that policy.
“We want to get it right, we are not rushing it, so reports that it is not going ahead are not accurate. There are a number of different ways you can do a merger process; we are looking at all of them.
“We are committed to the merger process. It is a matter of how you do it to make sure that you get the savings, but you also have the most efficient marketplace that you can have so reports this morning were inaccurate.
“…You won’t see us walking away from our election promise; you’ll see us working through it steadily with the best possible outcome in terms of savings for the budget, but also the market
Treasurer Curtis Pitt is due to give his mid-year economic update in two months. It is expected to include further information about the merge – what ever form it takes.
* Correction: A previous version of this story incorrectly reported Energex and Ergon merger may not go ahead.
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