Government Business Relation: Snowy Mountain Scheme Essay

Question:

Discuss about the Government Business Relation for Snowy Mountain Scheme.

Answer:

Introduction

The Snowy Mountain scheme of Hydro electric is one of the largest projects undertaken in Australia. Further, it is tagged as one of the largest and involves complexity too. It is overviewed as one of the strong defining stage in the history of Australia and even hailed as an identity that sheds light on the patronage of the country. In fact, it is important in economic terms as the farming industries are able to get water through it. The inland of New South Wales and Victoria depends on it (Brown, 2015). The system power station has tremendous capacity and produces more around ten percent of the total electric requirements of New South Wales. The Federal government has a ownership of 13 per cent, Victoria owns 29 per cent while New South Wales owns 58 per cent. With the due passage of time, it was observed that various authorities proposed for privatisation.

The Snowy hydro scheme consists of major dams, power stations, pumping station and numerous tunnels, pipelines, etc. thus, it is tagged as one of the major construction that is above the ground. It has a vital role to play in collecting water and then storing it so that the water can be stored and electricity can be generated. However, the size of the project is very huge and complex in nature thereby needing immense contribution of the engineers to establish new schemes (Brown, 2015). Going by the depth of the project, it is better to hand the project to privatisation or both the sector must work together for the common aim. Therefore, going by the very benefit of economy it can be said that the Australian government should not own it.

Moreover, the privatization of government owned enterprises is one of the main financing and operational plan. Privatization seeks the transfer of various activity and assets that were held by the public sector in the past. This happens through sale, concession or any other method. The government can determine the case accordingly. The main objective of not owing the Snowy Hydro scheme can be cited as day to day governance and services. This will helps the scheme as it demands attention on a major scale. This will help in benefiting the scheme and ensures a fuller development to the economy as a whole. Moreover, the public private scheme can even be sought that will benefit the economy (PPIRC, 2016). A public-private scheme is one of the major advantages that helps in steering the project forward and brings immense solidity to the scheme. Further, this will help in benefiting the entire project where the regulation will be done by one party while operations by another.

The developments till the date indicates that a change is highly needed that will provide a boost to the project. As it is complex in nature and needs attention on a higher basis therefore, requires attention and hence privatisation is the best answer. The main reason that can be cited for privatisation is that private companies are proficient in cutting down costs and tends to be efficient in nature. The government owned work do not have the same zeal. To ensure a better productivity and ensuring better productivity it is essential to involve the private sector. Snowy hydro involves complexity and the government ownership is not as lucrative as the private sector. Therefore, it is the need of the hour to go for privatization (Forrer et. al, 2010).

Direct government ownership of infrastructure is complex in nature and various benefits that can be seen in privatization is unavailable. The hydro power is a project that needs attention and innumerable innovation so that the project can be taken forward. As Snowy hydro is the third largest energy generator it needs strong attention to take it to the apex. Therefore, as per the need of the amendments and the community development it is important that the Australian government should not won it. It should be open to privatization as it will lead to immense benefits in the long run. Along with cost effectiveness, innovations will be at a top level. This will benefit the project and the community at large. Moreover, the state owned infrastructure battles with the fact that there is government interference that makes the work slow and rigid (Jacobius, 2007). Snowy Hydro Scheme fell short of the contribution and it can be cited as the main reason why the project cannot climb further heights. To innovate and reach drizzling heights, it is essential that privatisation should be there. Privatization does not contain political interference and it is the main reason why the private enterprises have succeeded. The work composure is more and happens at a low pace. This is why there have been backdrops and the same can be cited in the case of hydro power. Moreover, keeping the long term perspective in mind, the Australian government should not own the Snowy Hydro scheme as it involves a lot of contribution in terms of resources and capability. Allowing privatisation will reap benefits on a grand scale and hence, progress will be at a greater pace.

Going by the above discussion, it can be said that there are various advantages and disadvantages of government ownership of infrastructure. When it comes to government ownership of infrastructure there are various advantages. The essential services are provided at a cheap rate. This leads to less cost and hence, the major view is the public benefit. Moreover, the infrastructure is kept under great control as the sole objective is to safeguard the asset (Wettenhall, 2003). If it is left in the private hand it will be more on the profit basis. Secondly, government ownership of infrastructure does not vouch for profits rather benefits to the economy and people are the main objective. Moreover, when it comes to government owned infrastructure, it helps in creating favourable opportunities for the people however, the private ownership rests more on technology. Government owned infrastructure holds the major advantage that is to have a strong hold on the strategic sector of economy. There are certain industry and sector that needs to be tamed by the government so that a strong control can be established with ease and flexibility (Peirson, 1996). On the other hand, important infrastructure should be in the hand of the government as it will ensure an optimum result and will not harm the public (Huler, 2010). Therefore, government ownership of infrastructure ensures a better balance that helps the economy as a whole and is not based on profit motive.

However, the government owned infrastructure is not devoid of flaws. There are various disadvantages associated with it. When it comes to government owned infrastructure, the major stress is on the short term view. Hence, the long term perspective is eliminated. The government is more concerned with the benefits that accrue before the election and hence, long term benefits are not available (Wettenhall, 2003). Moreover, it has been commented from everyone that when government is operating the infrastructure there is less pressure because accountability is less. This leads to inefficiency. Further it is evident that the competition is less when it comes to government owned enterprises. Increment in competition is one of the major ways to enhance the efficiency. This is unavailable when it comes to government owned enterprises (Savas, 2000). The factor of corruption also comes into picture that can be stated as the biggest flaw. When management is not efficient in nature, problem appears and hence creates a weak environment. When the government owns the infrastructure, it does not own in an efficient manner that is evident from the past records. Lack of efficiency and issue has created immense problem thereby leading to low productivity. The presence of government ownership produces negative vibes of the workers. The team does not perform with effectiveness and hence a difference is observed as compared to the private ownership. The private ownership of infrastructure is more pronounced in nature and hence a better show is witnessed (Gaffey, 2010).

In totality it can be said that the government ownership of Snowy Hydro scheme will not bring prospective results as will be seen in the case of private ownership. As discussed above, private ownership has immense benefits that play a vital role in steering the business. Snowy hydro scheme needs a strong balance and support in the current scenario that is possible when the government does not own it (Gaffey, 2010). Further going by the benefit of the economy at large, it can be said that the private ownership of infrastructure will yield greater results that will not only cater to the requirements but will ensure a fuller development. Hence, in all probability, a chance should be provided to the private enterprises to tackle this scheme. Going by the innovations and the result it can be said that private enterprises will bring a great result as compared to the government. Therefore, Australian government should not own the Snowy Hydro Scheme and must let the private enterprises to work on the scheme for all around development.

References

Brown, B. (2015). Is Snowy Hydro powering up for privatisation?. Accessed October 19, 2016,

Forrer, J., Kee, J., Newcomer, K. & Boyer, E. (2010). Public-Private Partnerships and the Public Accountability Question. Public Administration Review (70) 3, 475- 484.

Gaffey, D. W. (2010). Outsourcing infrastructure: expanding the use of public-private partnerships in the United States. Public Contract Law Journal 39(2), 351-372.

Huler, S. (2010). On the grid: a plot of land, an average neighborhood, and the systems that make our world work. Emmaus, Penn.: Rodale

Jacobius, A. (2007). Infrastructure Traffic Builds. Pensions & Investments 35(8).

PPIRC. (2016). Public Private Partnership in Infrastructure. Accessed October 19, 2016,

Peirson, M. (1996). Public/private sector infrastructure arrangements. CPA Communique (73), 1-4

Savas, E. S. (2000). Privatization and Public-Private Partnerships. New York: Chatham House.

Wettenhall, R. (2003). The Rhetoric and Reality of Public-Private Partnerships. Public Organization Review 3(1), 77-107.

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