Paul Broad: Funding drama a “storm in a teacup”

Paul Broad resized
Paul Broad

The Snowy Hydro team has been left a little bewildered by the media attention surrounding a senate estimates session last week.

In the estimates, it was revealed that along with the $2 billion already announced by the government, for the Snowy 2.0 project to be successful the transmission lines carrying the electricity from the Snowy to Sydney and Melbourne will also need to be upgraded.

Those additional works will be undertaken by Transgrid, the private company that owns the poles and wires, and are likely to cost in between one and two billion dollars.

However, CEO Paul Broad said they were clear about that from the start.

“We said that right from day one, you can’t build [Snowy 2.0] without the transmission upgrades,” he said.

“That will be funded by Transgrid; it’s all Transgrid. In the Senate estimates when we were being asked, could it be this much could it be that much – we don’t really know. [The media] is trying to rev up a critical storm on that when it’s already been discussed in the wider community, and Transgrid were an integral part of those discussions.

“So I think it’s a storm in a teacup. The proposal that we first put out hasn’t changed, and we won’t know any more until we do the feasibility study.”

Transgrid, formerly owned by the NSW government, was sold to investors from Canada, Australia, Kuwait, and Abu Dhabi in 2015 for over $10 billion.

Transgrid are currently undertaking their own feasibility study on their upgrade to transmission lines, so nothing is certain. However, it is predicted they will undertake the upgrade themselves with the cost passed onto consumers through higher transmission charges, which are included in everyone’s electricity bills.

This is the traditional way the companies who own the networks make their profits – by undertaking upgrades and then making the costs back, and then some, through everyday consumers’ electricity bills – so it’s unlikely Transgrid will have a problem taking on the project.

No matter what, though, it won’t be funded by Snowy Hydro.

Mr Broad is keen to point out, too, that Snowy Hydro itself is much less taxpayer funded than many people seem to think.

“We’re as close as private as we can be,” he said.

“We borrow on our own right, we don’t have any government protection, Snowy Hydro does it all on our own bat. We borrow against our own balance sheet. We’re borrowing for this project, and we hope that it’s government money, the Prime Minister says it will be, but it’s us that’s borrowing.”

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