NSW MPs investigating the controversial $5.3 billion sale of the state’s electricity assets hope the Supreme Court will take the unprecedented step of subpoenaing witnesses to appear at a parliamentary inquiry into the sell off.

The upper house committee investigating the sell off this morning voted to issue summonses to the former directors who quit in protest over the hurried sale to appear at the inquiry. The former directors of Eraring Energy and Delta Electricity, fearful of being sued for defamation or breach of confidence, are expected to refuse to appear, setting the scene for a hearing in the Supreme Court.

A court hearing should finally resolve whether witnesses at the inquiry are covered by parliamentary privilege despite the fact parliament has been prorogued (shut down) until after the state election.

If the committee’s bid to force the former directors to appear is successful they will front the inquiry next Monday.

According to the house clerk, there is no record of a NSW parliamentary committee going to court to force witnesses to appear at an inquiry.

The inquiry got under way today in NSW Parliament House with Premier Kristina Keneally and Treasurer Eric Roozendaal facing at times fiery questioning from Coalition and Greens MPs over the much criticised $5.3 billion sale of the state’s electricity assets.

Among the revelations to emerge so far:

  • On December 21, a day before parliament was officially prorogued, Roozendaal made at least one phone call from New York to the chairman of the committee, Christian Democrat Fred Nile, voicing his opposition to the inquiry. Roozendaal said, “I didn’t ask him to shut down the process, I merely told him what my concerns were.” Roozendaal said he was concerned that the inquiry could adversely affect future transactions by revealing the reserve values of the state’s electricity assets. “I had concerns about the financial interests of the taxpayers of this state,” he said.
  • Premier Kristina Keneally was advised by the Department of Premier and Cabinet that the proroguing of parliament may affect the ability of standing committees to conduct their normal business before she decided to shut down parliament. But she denied that she had prorogued parliament in a bid to avoid scrutiny of the privatisation process. The Premier said that she did not have any discussions with Roozendaal about the prorogation date.
  • Several former energy directors have made submissions stating they declined to appear voluntarily at the inquiry because they felt “intimidated” by the Premier, according to Greg Pearce, a Liberal Party member of the committee. Keneally initially described the inquiry as “illegal” and warned that witnesses may not be covered by parliamentary privilege.

Treasurer Roozendaal defended the sale, saying, “The people of NSW received an excellent deal.”

“This is the most fundamental economic reform undertaken by this government or any government in this state in a generation.”

Mr Roozendaal said it was “inevitable” that some directors would resist the sell off given their responsibilities were to protect the interests of their own corporation rather than the interests of NSW taxpayers.

“We were asking a leopard to change its spots,” he said. “SOCs [state-owned corporations] would not vote themselves out of existence.”

Eight Delta and Eraring directors opposed to the sale dramatically quit on December 14 and their replacements voted for the sale at the Treasurer’s instruction.

Among the new directors are Kim Yeadon and Col Gellatly who are members of the Treasurer’s electricity sales advisory team and former senior public servants in the Premier’s Department.

Upper house Greens MP John Kaye told Crikey that the revelation taxpayers will have to foot the bill for maintenance problems at power stations was “far and away the most important thing to emerge today…It could be enough to totally soak up the amount that was made in the first place (through privatisation)”.

Dr Kaye said many in the electricity sector were highly disturbed by the risks associated with this arrangement.

Opposition Leader Barry O’Farrell slammed Premier Keneally for repeatedly refusing the committee members’ requests for her to indemnify the former directors from legal action.

“By refusing to guarantee protection for witnesses, Kristina Keneally’s intimidation of witnesses continues in a shameful denial of democracy,” Mr O’Farrell said.

“Kristina Keneally and Eric Roozendaal don’t want the public to hear the directors’ side of the story…Kristina Keneally talks about openness and accountability, but she’s doing everything she can to intimidate the directors into not appearing.”

During the committee hearing Premier Keneally criticised the Opposition for not releasing its own energy policy or clarifying its position on power privatisation. She called on Mr O’Farrell to appear at the inquiry. The Greens’ Dr Kaye said he supports the Premier’s call and hopes to see Mr O’Farrell answer the committee’s questions tomorrow or next week.

“It’s important that he’s there — he’s likely to be the next premier” said Dr Kaye.

UPDATE: On Monday night the General Purpose Standing Committee announced it would summon six former directors, one current director, Opposition Leader Barry O’Farrell and Shadow Treasurer Mike Baird to appear on January 24. The six former directors are:

• Mr Ross Bunyon AM, former Chairman, Eraring Energy
• Mr Tony Maher, former Director, Eraring Energy
• Mr Jim Henness, former Chief Executive and Director, Delta Electricity
• Mr Michael Knight AO, former Director, Delta Electricity
• Mr Loftus Harris, former Director, Delta Electricity
• Mr Paul Forward, former Director, Delta Electricity

The inquiry continues on Tuesday.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey