1 March 2012

Govt. gives no guarantees over dam sales

The Government will not legislate for any safeguards to ensure partially privatised energy companies won’t sell strategic individual assets, like dams, offshore, the Green Party said today.

The Minister for State-Owned Enterprises, Tony Ryall, confirmed during Questions in the House today that there would be no legislated protective mechanisms to stop Meridian, Mighty River Power, Genesis, or Solid Energy from selling strategic assets following partial privatisation.

“The Government is relying on provisions in the Companies Act in an attempt to secure Peter Dunne’s continued support for the Government’s centrepiece asset sale programme. However, the Companies Act provides no practical safeguards to ensure individual assets, like our dams, don’t fall into foreign ownership,” said Green Party Co-leader Dr Russel Norman.

“A partially privatised Meridian could sell the Manapouri dam to an Australian investor without ever invoking these so-called major transaction ‘safeguards’ in the Companies Act.

Major transactions requiring prior shareholder approval under the Companies Act must involve assets worth more than half of the company’s total assets.

“This is not protection as most New Zealanders would understand it. Major dams and power stations can be sold into private ownership without Government approval,” said Dr Norman.

“The big question remaining is whether Peter Dunne is happy to support the Government’s centrepiece asset sale programme without any practical safeguards whatsoever.”

The Green Party’s alternative plan for New Zealand’s publicly-owned energy companies is to keep them in public ownership and refocus their predominantly domestic operations towards booming renewable energy markets abroad. Securing a one percent stake in this global market would create a $6–8 billion export industry here at home.

“We can create tens-of-thousands of new, clean technology jobs in New Zealand if we’re smart about how we manage our last best state assets,” Dr Norman said.

ENDS

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