News | 27th Oct, 2010

Hazelwood write down clears way for closure

Wednesday, 27 October 2010
ABC News

The Commonwealth Bank has revealed at its AGM that it had written down its investment in Victoria's Hazelwood Power Station to only $1 million.

Environmentalists have seized on the comments as proof that Hazelwood could be closed down for a fraction of the compensation its owners may be seeking.

The Victorian Government is determined to close down the Hazelwood Power Station in the Latrobe Valley, with Premier John Brumby calling it Australia's "dirtiest and most polluting power station".

It emits 13 per cent of Victoria's greenhouse gases and 3 per cent of the national total.

Its owners International Power paid $2.35 billion for the plant in 1996.

The company would not tell PM how much compensation it is seeking to close it down, but the CBA's chairman David Turner revealed today that the bank's investment in an 8.2 per cent share of Hazelwood has been written down dramatically.

"The Hazelwood power station probably wasn't the best investment the bank made. It's been written down to a million dollars. And it's certainly not part of our core strategy and we wouldn't plan to repeat an investment like the one we made in Hazelwood," he said.

The questions about the plant's book value to the Commonwealth were put to David Turner by Greenpeace's climate campaigner John Hepburn.

Mr Hepburn has told PM even he was shocked by the revelations.

Environment Victoria's Mark Wakeham has seized on the bank's comments, saying it paves the way for the plant's closure.

"They admitted that it had been a poor investment. And I think this admission is really interesting. One of the major barriers to closing Hazelwood has been the anticipated cost of compensation," he said.

"The Commonwealth statement today suggests that past claims for compensation have been widely exaggerated. And in fact it would be much cheaper than anticipated to replace all of the power station."

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