O'Farrell's desal plant deal a disaster for taxpayers: NSW to pay new owners $1 billion in rent

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The O'Farrell Government has signed NSW up to a disastrous deal that will see taxpayers forced to pay $1 billion over five years to the new owners of the Sydney Desalination Plant.

This is despite the O'Farrell Government only making a $300 million profit from the long term lease of the desalination plant in the first place.

Proposed Refinancing of Sydney Desalination Plant - Information Memorandum, which reveals the deal forces NSW to pay between $195 and $202 million in annual payments to the successful bidders for the next five years, when a new price will be negotiated.

These payments must be made even though the desalination plant is currently switched off.

"The families and businesses of NSW will be forced to pay for the O'Farrell Government's disastrous deal. This will eventually lead to higher household water prices," Shadow Water Minister, Luke Foley said today.

"The O'Farrell Government is selling the desalination plant for a profit of $300 million, but is then going to pay rent of $200 million every year to the new owners. It is sheer madness."

Former NSW Auditor General, Tony Harris has criticised the agreement as a bad deal for NSW taxpayers:

"The gain is so small compared to the costs."

"It would be nice to say that the first major deal of the new government would be a smart deal, but no, it is a silly deal."

"Sydney Water customers will be forced to pay more."

(Wednesday, 26 September 2012)

"The O'Farrell Government is clearly acting in the interests of the private owners of the desalination plant at the expense of the water users of NSW," Mr Foley said.

"The people of NSW will now be forced to pay for the O'Farrell Government's bad deal for the next fifty years."