Opposition claims $250m wasted on Muja

The state opposition has called for an explanation why the government has been left to foot what it says is a $250 million bill to refurbish the Muja power station in Collie, after Premier Colin Barnett said in 2009 it would be funded by the private sector.

Opposition Leader Mark McGowan and spokesperson for energy Bill Johnston held a press conference this morning, saying the move was an “inexcusable blunder” that had left WA taxpayers with a massive financial loss.

The opposition claimed the government had already wasted $250 million on the project.

The refurbishment of the station was designed to hedge against energy supply disruptions following the Varanus Island gas explosion in 2008.

Premier Barnett said in 2009 that a refurbishment of the coal-fired station would cost around $100 million, and be funded by the private sector.

The redevelopment project was allocated $47 million in the 2012-13 state budget, $45.2 million in 2011-12, and $22 million was allocated in the 2010-11 budget for works at both the Muja and Kwinana power stations.

In the 2009-10 state budget, $84.9 million was committed to Muja.

In the state government's pre-election financial projections statement, released in February, a $71 million increase in net debt for the station was reported, due to delays in completing the works.

The government said, however, that $71 million was offset by Verve's improved profitability over the forward estimates period.

The Barnett government promised last October the refurbishment would be completed by January this year.

 “Mr Barnett’s risky decision to try to revamp an almost 50-year-old power station ignored all the best advice at the time that it was a huge mistake and now householders are likely to pay the price through higher electricity charges,” Mr McGowan said today.

Messrs McGowan and Johnston also called for former energy minister Peter Collier to be immediately sacked.

The opposition plans to raise the issue in Parliament today.

A spokesperson said the government would assess the issue in Parliament today and respond accordingly.