minimized as yesterday�s star stocks shed as much as 90% of their value. It would be years before the extent of the losses will be ascertained. And who but the government will be there to pick up the bill for all this sport?

The Governor of California has accused the bankrupt trading company Enron of having rigged up power rates to the tune of $20 billion.

You would imagine that at so solemn a moment governments would suspend major corporate restructurings until visibility of the past and future had improved. Yet this was the very moment that the government of Ontario chose to push ahead to sell off the bleeding segments of what was Ontario Hydro. The urgency, beyond a doubt, was that our banks and stock markets simply needed the business and in a big hurry.

For close on to a century after it was set up by a Conservative government, Ontario Hydro had provided reliable and inexpensive power. But at the very time that privatization in California was producing brown-outs, bankruptcies, and stock market scandals not seen since the early 1930s, Ontario�s Premier Mike Harris rushed ahead with breaking up Hydro into three corporations � generators, transmission lines, wholesale and retail traders. Each of these was free to trade on its respective market. But no self-respecting promoter will privatize anything � not even his grandmother � to score less than a killing. Our major problems today stem from stock market excesses rather than from problems with our power. And it is because of its own troubles that our financial sector has the capital accumulations in the public sector in its sights � hospitals, jails, schools, roads, railways, airports, and prince of all, energy systems. The entire Hydro privatization would run into some $10 billion.

Like every electrical utility on the continent Hydro has suffered huge losses � the so-called �stranded debt� amounting to some $26 billion, $4.5 billion of which have been assigned to Hydro One. But that was due less to poor management, than to the costly surprises of nuclear technology. There was not a major private utility in the United States without similar and far worse experiences. They were in fact the first to be hit with it. Remember Three Mile Island near Harrisburg, Pa.?

From the handling of the Hydro hot potato by Premier Harris�s successor, Ernie Eves, it is clear that the government rushed into the privatization without considering the costs of the adventure. Premier Ernie Eves is flying blind in a fog with ideology his only radar.

Bonanza in a Lean Year

When Harris retired, his successor Eves pressed on with the Hydro privatization. when a public storm broke loose. The Initial Public Offering of Hydro One � the transmission lines � had already been arranged. Bay St. was salivating over the commissions in the offing during a very lean year. Private companies were signing up customers at fixed rates well above the current ones. At that point Mr. Justice Arthur Gans of the Ontario Supreme Court ruled that the province had no legal power to privatize the transmission lines. The government beat a ragged retreat. Energy Minister Chris Stanwell, confronted by a hostile audience in London, announced that he was dropping the idea of a sale of the public assets to consider a lease running from 25 to 99 years.

A few days later the Government suffered another set-back when a senior official at the Ontario Energy Board declared that Ontario�s Electricity Act has no provision for municipalities selling electricity distribution companies they had acquired � a total of 88 local electricity companies had been bought by Hydro One from such municipalities at a cost of $500 million. In the rush to get the Big Deal done, the government had skipped doing its homework.

Meanwhile, the prospectus for the Initial Public Offerings of Hydro One reveals some shocking details of the type of savings we can expect from it. The Globe and Mail (15/05, �Hydro One Payouts to be Probed� by Richard Mackie) reports: �The president of Hydro One, Eleanor Clitheroe, was formerly a deputy minister of finance and received payments last year of $1.8 million with $174,000 for cars and $173,000 in vacation pay. This from a company burdened with $5 billion of stranded debt arising from its nuclear plants.

�In the event of the sale of Hydro One, Ms. Clitheroe will receive between $5.4 and $6 million and an annual pension between $700,000 and $1 million as a pension adjusted to inflation.�

What does this remind you of? Surely the ex-Commie biggies in the Soviet Union, who put to profitable use their knowledge of where the gems were buried in the public domain and before going private cut