Premier Tony Wakeham says the Independent Review Committee determined that the 2 per cent escalation clause on Gull Island power – included in the 2024 MOU – had to go.
Premier Wakeham says the escalation clause would have driven up the price to such an extent that the balance owing on Gull Island after 50 years would be in the region of $30 billion.
He compares it to being saddled with a mortgage.
“So essentially, we would have a huge debt…a balloon debt that would have to be paid out. Now, that has been significantly reduced. I think it might be $7 billion in today’s dollars and maybe $200 million plus, so that was a huge difference to get that off the books.”
(VOCM News)
Wakeham says instead, they’ve secured price increases which have been built into the contract.
“We have inflation protection built into the contract, so we are able to secure that. At the end of 51 years, we will have an asset, a Gull Island asset, of which we will own 60 per cent, which will have a small amount of debt left as compared to what was originally envisioned.”
