Cap on foreign role in Snowy fails to placate critics - Business - Business

SNOWY Hydro will be spared from foreign control after the federal, NSW and Victorian governments caved into rising public and political anger at its imminent $3 billion-plus sale.
But despite the three governments unanimity on the appropriateness of the sale, the privatisation is not out of the woods yet.
The Electrical Trades Union plans to block it at the NSW Labor Party conference next month unless Snowy workers are given a better superannuation deal. The union was a key opponent of government plans to sell the state's electricity industry 10 years ago.
Community objectors said yesterday that their concerns went beyond foreign control. A Jindabyne protest leader, Acacia Rose, said: "The bottom line is that one of the iconic industrial achievements should remain in public hands, and that that is the only guarantee on things like foreign ownership because government commitments tend not to stick."
The threat remains of a High Court challenge involving a coalition of politicians, farmers and environmentalists.
The independent MPs Peter Andren and Tony Windsor will push for the parliamentary motion approving the sale to be rescinded. Mr Andren said: "Today's joint announcement is simply a sticking of a collective federal and state digit in the dyke, or at least the dam of public opinion.
"Caps can't be guaranteed beyond this Parliament, and the Government knows it."
Having slipped the sale through Federal Parliament without legislation, the Government announced legislation would reaffirm the sale and prohibit individual foreign investors owning more than 15 per cent of Snowy Hydro.
Total foreign ownership will be capped at 35 per cent, head office will remain in Cooma, most directors will be Australian and the company must be incorporated here. The cap will cut the sale price by tens of millions because it reduces the likelihood of takeovers, and the legislation will delay a sale until early August.
Yesterday the Minister for Finance, Nick Minchin, said the foreign control issue was being targeted because it was "the biggest concern raised" and because foreign ownership of Telstra and Qantas was similarly restricted.
The Prime Minister, John Howard, said Australians could "only benefit from this sale" because environmental and farm water flows were guaranteed and because the "private sector is better at running private businesses than the government".
The NSW Minister for Commerce, John Della Bosca, said "the legislative protections we have been able to achieve will keep the company in Australian hands".
The Liberal senator Bill Heffernan, initially an anti-sale advocate who lobbied Mr Howard, applauded the foreign limit, which he said had settled Coalition nerves.
Now he wants the 15 per cent ceiling on individual foreign holdings extended to locals, to stop big Australian companies taking control.
There were also claims yesterday that Snowy Hydro was trying to buy the silence of its workers by arranging $1000 share allocations for them after the sale was completed.