The push towards privatisation is gaining momentum with federal Treasurer Peter Costello saying yesterday that Canberra might sell its 13% stake in the electricity producer.

But Victorian independent MP Craig Ingram claims that privatisation could let the hydroelectric power company to avoid its stated commitment to restoring 21% flow to the Jindabyne.

Up to 99% of the environmental flow of the Snowy River was diverted to the Jindabyne Dam when the Snowy Mountains Hydro-electric Scheme began in the 1960s.

Victoria’s Department of Sustainability and Environment has since said this diversion caused increased levels of sediment in the river, weed infestation and reduced habitat for native flora and fauna.

In 2002, an aqueduct that diverted flows from the Mowamba River to the Jindabyne Dam was closed when the NSW, Victorian and federal governments agreed that maintaining and restoring flows to Jindabyne and the Mowamba was a priority for both the environment and downstream agricultural water-users.

Victorian Treasurer John Brumby has also rasied concerns, saying the sale of the NSW controlling stake left the two remaining shareholders – the Australian and Victorian governments – uncertain of their ability to influence operations at the project.

NSW Greens leader Lee Rhiannon said the NSW Government’s decision to float its Snowy Hydro equity showed the Iemma Government was going back on commitments made by the Carr Government.

“It’s the loss in flexibility in managing the business of the Snowy, both energy and irrigation, that could reduce our chances of moving into greater renewable energy,” Rhiannon told the Financial Review.

“Once it’s in private hands the public hasn’t got a say… one of the first things to go will be environmental protection.”