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Manukau City Council drops fight for Vector assets

Press Statement
18 April 2008

Jami-Lee Ross
Manukau City Councillor for Howick


Manukau City Council drops fight for Vector assets


The Manukau City Council yesterday decided to drop its opposition to the continued existence of the Auckland Energy Consumer Trust (AECT).

At a meeting held to debate the Council’s submission to the Royal Commission of Inquiry on Auckland Governance the Council unanimously voted to delete all references to abolishing the Trust.

The Council Chief Executive Officer and staff had controversially recommended the Council advocate in front of the Royal Commission that the AECT should be abolished. The suggestion was that the AECT’s 75.1 percent ownership of Vector Ltd should be vested with Auckland Regional Holdings, with a small payout to consumer beneficiaries.

Manukau City Councillor Jami-Lee Ross successfully argued at the Council meeting that the Manukau City Council had no right to ask for AECT to be abolished. To do so, he contended, would be to trample on the private property rights of 300,000 AECT consumer beneficiaries from Manukau, Auckland and Papakura.

“The AECT offers a successful and popular ownership structure which benefits electricity consumers who would not normal own shares and reap the subsequent dividends.

“Unfortunately some have seen the Royal Commission process as an opportunity to launch another raid on Vector assets. The Council has rightly rejected that approach.”

Manukau City Council has been a party to previous unsuccessful attempts to wrest control of Vector from AECT. One attempt involved extensive litigation that established that capital beneficiaries have no powers to intervene with AECT or Vector.

Mr Ross says there is little evidence that local government could add further value to Vector. He believes it would predominantly be used as a cash cow for spending on other regional projects, rather than further investment in energy infrastructure.

“There is no compelling reason why Vector assets need to be owned by local government. Manukau residents and ratepayers already have a significant stake in Vector through the Trust.

“The proposed payout of $4000 also pails in comparison to 65 years worth of future dividends that the AECT intendeds to pay.”

Mr Ross says he is pleased Manukau City Council has seen sense in leaving AECT alone. "The Council has accepted that the Trust model is working well for 300,000 consumer beneficiaries. The Council has also confirmed that it still values private property rights and should not be attempting to confiscate them.”


ENDS

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