Shareholder notifies removal of ECNZ indemnities

News Release
26 March 2013

Shareholder notifies removal of ECNZ indemnities

Mighty River Power was advised today that the Company’s Shareholders had taken steps to remove historical Crown indemnities that had been in place since the formation of Mighty River Power in 1999.

Mighty River Power Chair, Joan Withers, said the Shareholding Ministers confirmed with the Board that the indemnity provisions in the 1988 ECNZ Crown Sale Deed which had transferred to Mighty River Power – providing compensation rights in certain circumstances – were to be removed.

The Crown also confirmed with Mighty River Power that it has taken the same approach in relation to the other proposed mixed ownership model companies with similar rights.

Mrs Withers said that the scope of these compensation rights had not been tested. However, the removal of the indemnities means the Company did not now have the protection of those specific indemnities. The first of the indemnities removed relates to the Company’s use of water and geothermal fluid, where (to the extent they are not otherwise recoverable), any tax, royalty, levy or impost affecting power stations which were in existence in 1988 could now no longer be recovered from the Crown. These effects could arise as a result of statutory and regulatory action giving effect to policies introduced by the Crown or as a result of Court decisions.

The second of the indemnities relates to circumstances where, pursuant to a Waitangi Tribunal recommendation, ownership is transferred to Maori of former Crown owned land. Compensation to the Company for the loss of this land, which could include land beneath the Waikato hydro system, would now be limited to statutory compensation under the Public Works Act. The now-removed indemnities provided additional compensation in the event that the Public Works Act did not fully compensate the Company.
ENDS

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