State Cabinet today endorsed a decision by SECWA that Asea Brown Boveri be given sole mandate to develop the coal-fired power station at Collie.
Premier Carmen Lawrence said the decision was in the best interests of all Western Australians as it would produce the cheapest possible electricity tariffs for the State.
"However, the recession has forced SECWA to allow deferment of up to 15 months on the project, because short-term growth-rate projections are below those of two years ago," Dr Lawrence said.
"Supply and demand must be carefully balanced for the Government to meet its undertaking to reduce energy tariffs by 25 per cent by the year 2000.
"The one-year deferral is expected to improve SECWA's cash flows by more than $50 million a year."
Dr Lawrence said if demand increased, the project would be brought forward.
The power station was now scheduled to come on-stream in 1998. SECWA officials led by Commissioner Norm White today briefed Cabinet on the move to award ABB sole mandate for the project.
At the same time, Cabinet was told that SECWA's board had decided on new commissioning dates of January, 1998 and January, 1999 for the two generating units.
"The Government is mindful that it does not repeat SECWA's difficulties in the 1980s in managing an over-supply of generating capacity at a time when it also had a surplus of gas from the North West Shelf," the Premier said.
"SECWA believes a private power station at Collie is the best way of achieving this. We are giving the private sector every opportunity to deliver on its claim that a private power station will be cheaper than the traditional SECWA approach.
"This is the reason why ABB has been given sole mandate.
"The company's revised bid is preferred because it is more attractive than the final Mitsubishi Transfield proposal and is supported by a strong financial plan for raising both debt and equity.
"The Government is disappointed that Mitsubishi Transfield - the original sole bidder - was unable to deliver its promised tariff."
Dr Lawrence said that with its sole mandate confirmed, ABB would be able to finalise its finance arrangements with a view to concluding an interim agreement with SECWA in October.
Fuel and Energy Minister Geoff Gallop said the new commissioning dates meant that construction would start in early 1994.
"The essential advantages of the Collie power station remain unchanged," Dr Gallop said.
"Because of the concessions given by the coal companies and SECWA unions, the coal option results in lower electricity tariffs sooner than any other option.
"As well as bringing lower tariffs immediately, a privately-owned and operated power station at Collie will provide a competitive benchmark as far as performance in concerned."
Dr Gallop stressed that SECWA and the Government were firmly behind the coal decision.
