Finance Minister Michael Cullen and State Owned Enterprises Minister Mark Burton have ordered that plans to sell the Waikaremoana Power Scheme be dropped.

"Both coalition parties promised a stop to asset sales in the election campaign," the Ministers said. "This announcement delivers on that promise."

The Waikaremoana Scheme - comprising the Kaitawa, Tuai and Piripaua hydro stations - is controlled by the state-owned generator, Genesis Power Ltd.

"Genesis did not want to sell. It had sound commercial reasons for retaining the asset. But it was acting under instruction from the previous Government. That order has now been rescinded.

"This Government believes electricity generating capacity is a vital strategic asset best held in public ownership," the Ministers said.

Genesis Chief Executive Murray Jackson today welcomed the Government's decision, saying the Waikaremoana Scheme was important to the company's operation.

"It provides peaking capacity, allowing Genesis to extract higher levels of reliability and efficiency from the base load Huntly Power Station. It is also important in allowing Genesis to deliver competitive power prices to our end users," he said.

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