Shortcomings in Ausgrid deal: NSW auditor
The process surrounding the $16 billion privatisation of more than half of NSW government's electricity assets reduced the likelihood of the state securing a higher price, the auditor-general has found.
NSW Auditor-General Margaret Crawford on Tuesday released a report on the 2016 lease of 50.4 per cent of electricity supplier Ausgrid to AustralianSuper and IFM Investors for 99 years.
Ms Crawford in the report outlines three areas of concern regarding the sale including the government's decision to disclose an acceptable price early in the negotiations.
The report details a meeting between the then-Treasury secretary and the two companies, where he told them his "personal views on the initial offer", including a suggested price.
Later the same day, the companies revised their proposal to match "exactly the dollar price suggested by the Treasury secretary".
The following day, the state entered a "participation agreement" based on the revised proposal.
The Department of Premier and Cabinet and NSW Treasury did not provide the auditor-general with the minutes of the meeting.
"Shortcomings in the negotiation process means it cannot be assured that optimal value for money was achieved," the report says.
It also outlines the way the deal was brokered - through an unsolicited proposal.
Unsolicited proposals allow a company to make a confidential approach to the NSW government with a unique proposition. If accepted, the proposal does not need to go to tender.
The auditor-general refutes the claim the 2016 proposition was unique.
"The evidence did not show beyond doubt that no other proponent could have put in a viable bid or that there was no other way to conclude the lease transaction," the report says.
"It is also not appropriate to determine that an unsolicited proposal is unique because it delivers an earlier outcome than possible through a tender process."
NSW Opposition Leader Michael Daley says the report makes him "cranky".
"It just makes me cranky because the people of NSW deserve better than this," he told reporters on Tuesday.
"Governments are supposed to do better than this."
