News Wrap

IN THIS morning’s wrap: mining contractors overly ambitious, says Clough; power market at risk of collapse, analyst warns; Greens call for coal-fired generators review; and uranium tops bill as Prime Minister Julia Gillard heads to India.
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Former Prime Minister Julia Gillard.

Lou Caruana

Mining contractors overly ambitious, says Clough

Clough chief executive Kevin Gallagher has blamed over-ambitious tendering among engineering companies for some of the difficulties in the sector, arguing that they should have taken on fewer contracts and better anticipated the slump in market conditions, according to the Australian Financial Review.

Gallagher said contracting businesses had become too exposed at the top of the cycle after boosting their order books of new work without properly assessing their ability to execute additional projects.

Power market at risk of collapse, analyst warns

One of the early architects of Australia’s national electricity market will call for a full-scale overhaul of the market design, warning that government intervention on carbon, renewable energy and power prices meant it was at risk of failure, according to the Australian Financial Review.

Managing director of consultancy Frontier Economics Danny Price will tell a conference in Melbourne that the national electricity market (NEM) is no longer “fit for purpose” because of the distorting effect of a multitude of ad hoc state and federal regulations.

“The whole design of the national electricity market revolved around efficient prices and a competitive market, but that is not achievable any more because of the way other regulation is influencing the operation of the market,” he said.

Greens call for coal-fired generators review

The Greens have sought to amend government legislation linking the carbon scheme to Europe to require the Productivity Commission to immediately review assistance for coal-fired generators, according to the Australian Financial Review.

Greens deputy leader Adam Bandt said the commission needed to review $A4.5 billion in free permits to brown coal generators because of a danger of windfall profits.

Greens leader Christine Milne said the government couldn’t be serious about cutting emissions if dirty generators were compensated to stay in business.

Uranium tops bill as Julia Gillard heads to India

Australian Prime Minister Julia Gillard is set to take part in top-level talks in New Delhi, India, next week that could pave the way for negotiations on a treaty to open up uranium sales to India, according to The Australian.

It is understood the talks will revolve around opening up negotiations on a safeguard treaty that would be required before exports could commence.

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