NEWS RELEASE

16 January 2001

RECOMMENDATION TO COUNCIL TO APPEAL JUDGEMENT

Auckland City Council's Investments Committee will ask the full Council to appeal the Court judgement on the dispute between it and the Auckland Energy Consumers Trust (AECT).

Deputy Mayor, Dr. Bruce Hucker said the committee had received independent legal advice stating that Mr Justice Paterson's judgement, on a number of aspects including that all income could be distributed to current consumers, was seriously flawed.

"Given the serious implications of Justice Paterson's decision for our constituents, it would be irresponsible of the Investments Committee not to at least put this matter before full Council," he said.

Dr. Hucker said the judgement delivered by the High Court is far reaching in its consequences and Council has a responsibility to look ahead and protect, for future generations, the assets that belong to the City.

"Allowing all income to be distributed puts those assets at risk," he said.

Appealing the decision does not mean the dividend payout to consumers of Vector Limited will be held up.

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Dr. Hucker said Auckland City Council today put a proposal to the AECT Trustees saying that the Council agrees to the immediate payout of all the dividends held by the Trust, except for the $31m identified as capital by Justice Paterson in his judgement.

Dr Hucker said that retaining the $31million as capital and not distributing it as income was an important issue for Council and would be the primary matter of the appeal.

"The retention of this amount in public hands means that necessary undergrounding of powerlines could proceed quickly and improving the security of the electricity supply could be given higher priority" said Dr Hucker.

"We only have to look back to the 1998-electricity crisis to see the disastrous consequences of badly maintained supply systems letting the City down," he said.

"We can't afford to take a short term view and allow all of the capital to be dispersed when it could be used for upgrading the infrastructure of our essential services.

The cost would be no more than $200,000 if Council decides to go ahead with the appeal.

"This is not a huge amount when we are talking about ownership of the future assets of the City that have a present estimated market value of $1.4 billion," said Dr Hucker.

ENDS

For further information please contact:
Dr Bruce Hucker, Deputy Mayor
Tel: 3760246 or 3077584

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