Queensland’s power privatisation plans won’t necessarily be good news for investors, global credit ratings agency Fitch says.
Queensland’s power privatisation plans could weaken the credit ratings of generators and an energy retailer, global credit ratings agency Fitch says.
The Liberal National Party government is planning to sell power generators Stanwell and CS Energy, and Ergon’s retail business, if it wins the 2015 election.
Ergon’s power distribution would remain in government control but with private investment allowed in exchange for a share of future profits.
The government-owned corporations kept their AA credit ratings with Fitch but their outlooks were downgraded to negative because of the LNP’s privatisation plan.
Fitch said this reflected a weakening in their strategic links to the Queensland government “should the entity be privatised”.
It said a sell-off could lead to a multi-notch downgrade of Stanwell, CS Energy and Ergon’s ratings “to a level consistent with its stand-alone credit profile”.
But Treasurer Tim Nicholls said Fitch was “totally wrong” and demanded a retraction from the ratings agency.
“No proceeds from any potential sale were factored into the 2014/15 budget, a point I made clearly in my budget speech,” Mr Nicholls told AAP in a statement.
“Our government has said on numerous occasions that its Strongest and Smartest Choice plan would be taken to an election for a mandate from the people of Queensland, to reduce our debt and interest bills so we can invest in building a brighter future for the state.”