A number of media outlets have run stories on how the electrical supply system in NSW is about to get an $18 billion overhaul.
Given that the current electrical network is not worth that much (in terms of current book value of the assets), I was wondering where they are going to spend that $18 billion and on what.
I went hunting for media releases in the last week by Ian Macdonald MP, the Minister for Energy and everything else. This is all I could find:
There appears to be not a single document anywhere that actually lists all the projects that add up to $18 billion.
Then there is the matter of households paying an extra $2.50 a week to fund this.
According to this press release, there were 2.65 million households in NSW in 2006.
If each pays an extra $125 per year, it will raise $331,250,000 per year.
This $18 billion project is supposed to be completed in 5 years. In that time, the additional household levy will raise $1,656,250,000, or $1.65 billion. At that rate, it will take nearly 54 years to raise $18 billion.
So, what is it going to be?
If we stick with a 5 year time horizon, the expenditure will be $1.65 billion (assuming the remaining $16.35 billion is not borrowed in the meantime).
If we stick with the $2.50 per week per household idea and an $18 billion project, it will take 54 years to deliver.
Either way, it doesn't stack up. Someone is playing fast and loose with the numbers.