The Victorian power privatisation is an interesting case. The State Electricity Commission had been run by engineers with built in redundancy to provide 100% power supply. Before privatisation the SEC retrenched surplus employees, spent heavily on capital improvements then sold off the operation to overseas interests at bargain basement prices. To that extent state operated enterprises don't run profitably if they are sold off cheaply.

With hospitals time and time again the state government built new buildings and sold them off cheaply to private operators while the public patients creaked along in the old buildings.

I am glad that readers are discussing this article and hopefully realise that the author was playing the devil's advocate. By extolling the virtues of privatisation touted by the World Bank, by examining the lack of success, and the precarious nature of conditions that are necessary for success, the author has tried to get the reader to see that the industry is totally ill prepared for privatisation, and that a public private partnership is the only way to go. Ask yourself when has privatising a public monopoly worked without creating an even worse nightmare? The requisite conditions must be created for private entrants to set up power stations whenever they can, first of all. Privatising in an industry where it takes enormous knowledge, manpower, natural resources and capital to set up, when the existing providers are hardly functioning in an efficient manner, such as in the water industry, is a recipe for natural disasters. It is bad enough for sparsely populated areas such as Bungonia and even the top of the Blue Mountains to endure regular powerouts, let alone for areas such as the inner North Shore to suffer similar fates due to maintenance problems. We should all remember what happened in New Zealand when the newly privatised power suppliers decided to cut costs by only running one power line into Auckland in the eighties. Treasury rooms of banks had no disaster plans and had to relocate to Sydney. Where will the Treasury rooms of Sydney go when and if we go fully private without adequate preparation?? Remember the case of the State Bank of NSW to which the author obliquely refers.

There are many instances where privatisation has improved efficiency, the cases where there were problems almost always have high performance and low cost expectations that the state itself could not meet.

The comment that Victoria Sold its power generation cheaply is rubbish, as it went out on open tender, and was more to do with the poor condition of the existing plant, and high cost of job retention clauses that the state included.