29 February 2012

Dams could be sold under partial privatisation

The Government’s plans to retain 51 percent of our state-owned enterprises does not guarantee individual strategic assets, like our dams, will not fall 100 percent into foreign private control, the Green Party said today.

Treasury advised the Finance and Expenditure Committee today that partially privatised state-owned energy companies should be managed in a strictly commercial way and wouldn’t rule out the possibility that individual assets could fall into foreign ownership.

“Shareholding Ministers will manage their 51 percent shareholding according to ‘best commercial practice’ rather than what is in the best public interest. If it makes commercial sense to sell a dam or two — they’re gone,” said Green Party Co-leader Dr Russel Norman.

“Holding 51 percent of an energy company will not, by itself, guarantee that individual assets remain in New Zealand control.

“Under the Government’s privatisation plans, if Mighty River Power is offered a commercially attractive bid for their Waikato River dams from an Australian or Chinese investor, the Crown’s directors on the board will be obligated to act in the best commercial interest of the company and possibly sell those dams.

“The Government’s partial privatisation plans mean they will be giving up New Zealand’s long-term strategic interests for short-term commercial expediency.”

The Government previously admitted to Maori in their consultation that, ‘Under the Mixed Ownership Model, Ministers’ legal powers will be those afforded to shareholders under the Companies Act 1993. In practice, Ministers will look to best commercial practice in how they exercise those powers’.

“The possible loss of individual strategic energy assets under the National Government’s plan for privatisation is very real and hasn’t been solved,” Dr Norman added.

“It’s yet another reason why the Government’s asset sale programme is plain dumb.

“An alternative plan to selling off the best of our last remaining SOEs is to keep them and refocus their largely domestic operations towards booming renewable energy export markets abroad.

“We can create tens of thousands of new, clean technology jobs here at home if we’re smart.”

Link to Government’s consultation document with Maori (see page 10): http://www.treasury.govt.nz/publications/reviews-consultation/mixed-ownership/mom-cons-maori-v3.pdf

The Green Party's alternative plan for our energy SOEs: http://www.greens.org.nz/greenjobs

ENDS

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