License article

Victorian government's Snowy Hydro promise remains on hold

The state government has refused to commit to its election promise to change the Victorian constitution to ensure the Snowy Hydro scheme is never privatised.

The pledge was part of the Coalition's water policy platform heading into the 2010 state election, which stated that in government it would ''amend the state's constitution to prevent a future state government privatising this strategically important asset''.

The Coalition has said little about the commitment since it took office.

In 2012 Water Minister Peter Walsh said it would implement it through a water law reform currently under way. But draft changes to Victoria's water laws released just before Christmas contain no reference to any constitutional change.

Asked last week whether a constitution change will occur and when, Mr Walsh responded: ''We stand by our commitment that under a Coalition government, the Snowy's iconic infrastructure will remain in public hands.

''Given Victoria holds a minority share, we are still examining the best way forward.''


Mr Walsh's office refused to elaborate.

While the National Party is still attracted to a constitution change, it is understood some in the Liberal Party are less enthusiastic about locking in any course of action.

The Victorian constitution can be altered in three ways - referendum, special parliamentary majority, or regular majority - depending on the change to be made. It is understood changes needed to block privatisation of the Snowy Hydro would require a special majority of Parliament of three-fifths of members.

Victoria holds a 29 per cent share in the hydro scheme, with NSW (58 per cent) and the Commonwealth (13 per cent) owning the rest.

While the sale of the Snowy Hydro is not on the immediate agenda, privatisation more generally has become a major issue in recent months. Federal Treasurer Joe Hockey has raised the prospect of incentive payments for states to sell off public assets and put the money into new infrastructure.

The Victorian Labor opposition has vowed to sell the Port of Melbourne and use the money to fund the removal of 50 level crossings throughout Melbourne. The Napthine government is also considering privatisation of Melbourne and Hastings ports under a staged leasing agreement.

The chief executive of Infrastructure Partnerships Australia, Brendan Lyon, said the sale of Snowy Hydro was an ''extremely logical'' outcome. ''You've got three shareholding governments who are in difficult and complex budget circumstances and have a huge backlog of other uses for this money,'' he said.

But Environment Victoria water campaigner Juliet LeFeuvre said privatisation would make the profit motive more important to the hydro scheme, and as a result less likely to deliver much-needed environmental water to the Snowy River.