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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2008-09-23 Daily Xml
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Mr GRIFFITHS (Goyder) (15:19): My question is to the Treasurer. Has the government reviewed the short list of bidders for the new prisons PPP given that two of the three short-listed consortia have funding providers that are currently experiencing severe financial turmoil? The Treasury website reveals that two of the equity and debt providers for this PPP are Babcock & Brown and ABN Amro, which have shed up to 96 per cent and 44 per cent of their market value in the last 12 months.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (15:20): One needs to be very careful in answering a question such as that because I have no intention of making a comment that may, adversely or otherwise, impact on the share value of a listed company. In fact, I do not know what the market is today, but I noticed yesterday that the shares in Babcock & Brown, the parent company, went up some 57 per cent, I think, or thereabouts. I accept that in this current world environment one cannot predict the future of any bank of any size with any confidence, but ABN Amro is an incredibly large bank from Europe. Again, I have no reason to alter any of the planned arrangements with the public-private partnerships. Obviously, at times of fragility in the international financial market, one will weigh up all of those matters at the evaluation of respective tenders as they come in, and obviously a capacity to fund projects is very important.

But I will make this observation by way of explanation to the shadow minister for finance: I think that in most cases, if not all, these bids are what are called debt financed. These companies will not be funding these projects off their own balance sheets. They will be originating the debt from other providers and they will not be carrying the full debt on their balance sheets, so these are debt-financed projects.

I say to the shadow minister that, notwithstanding what might appear to be a cheap and easy hit in parliament, one has to be very careful about what material impact any comments, questions or answers may have on publicly listed companies, for which this government obviously watches very—

Ms Chapman interjecting:

The Hon. K.O. FOLEY: I am not even going to put that interjection on the public record for any damage it may do.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: I want to reiterate that, as the situation stands, the consortia that have been put on the short list are sound and viable consortia. If anything should occur that makes that otherwise, I will report that information publicly and to the house.

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