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Pollution pays off for billionaire

Marian Wilkinson and Ben Cubby

Michael Kadoorie, left, in Hong Kong. Photo: AFP

A HONG KONG billionaire will receive millions of dollars in compensation under the Rudd Government’s emissions trading scheme – but would get almost twice as much under the Opposition’s plan.

The tycoon and philanthropist, Michael Kadoorie, is the chairman of CLP Holdings, formerly China Light and Power. The company, partly owned by his family, has power stations in Hong Kong, China, India and Thailand but one of its most heavily polluting plants is Yallourn in Victoria.

Under the Government’s scheme, Yallourn would share in $3.9 billion in free permits and assistance allocated to electricity generators to help them when companies and consumers begin to pay for emissions from 2011.

But under the scheme the Opposition Leader, Malcolm Turnbull, is advocating, the amount of compensation for generators such as CLP would more than double.

Mr Turnbull is demanding the Government raise the amount of assistance to between $8 billion and $10 billion.

The author of the Frontier Economics report Mr Turnbull released on Monday, Danny Price, has been one of the NSW Labor Government’s top-paid energy consultants for a decade and helped design the failed plan for privatising the state’s electricity industry.

Last year the federal Climate Change Minister, Penny Wong, promised that electricity generators would get the $3.5 billion assistance spread over five years because it was ”a necessary and important contribution to support essential new investment in the Australian electricity generation sector”.

Apart from Sir Michael’s company, which owns Victoria’s TRUenergy, British power giant International Power will also benefit through its ownership of the Hazelwood and Loy Yang B plants.

The British company owns generators in Indonesia, Britain, Pakistan and Europe and recently sold its Czech power plants for a reported $US1.24 billion ($1.48 billion).

The investment company, Innovest, in a report for the Australian Conservation Foundation, says International Power could receive about $84 million, Sir Michael’s company, CLP Power International, $55 million and Japan’s Tokyo Electric Power $31 million for its partial ownership in the Loy Yang A station.

The companies declined to comment yesterday on the Opposition’s latest commitment but both have been vocal in demanding Senator Wong increase the assistance.

The head of the Energy Supply Association, Brad Page, told the Herald the foreign generators’ claims were not exaggerated.

”There is a genuine, serious issue here”, he said. ”It’s not about who owns these companies and assets. This is about the sovereign risk that is attached to Australia.”

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