Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Infratil somewhat bruised by dealings with regulators

Infratil somewhat bruised by dealings with regulators, seeks details of govt's infrastructure plans

By Jonathan Underhill

Nov. 15 (BusinessDesk) - Infratil has reeled off a list of what it calls "unhelpful regulatory interactions" this year that have left the publicly listed infrastructure investor wary of both lawmakers and regulators.

The company, which is managed by Wellington-based investment bank HRL Morrison & Co, last week posted a 16 percent gain in first-half profit, helped by the contribution from its 50.5 percent-owned Trustpower, but also said it was a period when it sometimes felt wrong-footed by the state sector.

"At times it’s difficult to retain confidence in law makers and regulators," chairman Mark Tume and chief executive Marko Bogoievski say in their first-half report.

Issues included the decisions of regional transport authorities in awarding contracts to operate public transport bus services, which have seen Infratil's NZ Bus unit cede ground to rivals. Last month the company said NZ Bus had concluded negotiations with Auckland Transport while negotiations in Wellington were ongoing, and overall it expected the business to shrink by about one third.

"NZ Bus and its people have been impacted by low-cost choices by regional transport authorities," Tume and Bogoievski said. "Winning tenders appear to have been based on the operators paying lower wages." In May, NZ Bus lost most of its bus contract with the Greater Wellington Regional Council to Masterton-based Tranzit Group, which the council said could offer the service cheaper, reducing its share of services to 28 percent from 73 percent.

Meanwhile, resource consent applications for a runway extension at Infratil's 66 percent-owned Wellington International Airport have been put on hold pending a court decision as to how the Civil Aviation Authority should interpret the regulations which guide its decisions.

Across the Tasman, Tume and Bogoievski say, the regulation of Australia’s energy markets "continues to be in turmoil."

"On a number of occasions some of Tilt Renewables’ operational wind farms were switched off because South Australian grid rules required the use of gas/coal fired plant," they said.

Tilt was created when Trustpower spun out its wind and solar generation facilities into a separately listed company in 2016. Question marks hang over its 2016 investment in US renewable energy company Longroad Energy, after US President Donald Trump "announced a policy to subsidise nuclear and coal fired generation."

The US Department of Energy has proposed that compensation to coal and nuclear plant operators include recognition of their contribution to the reliability of the national grid. The proposal, which is being driven by US energy secretary Rick Perry, would extend the life of hundreds of aging coal and nuclear plants, critics say.

Special purpose funds associated with Infratil and Morrison & Co have been a significant partner to the government in recent years under various public-private partnership schemes including long-term concession arrangements to finance, build and maintain assets including prisons and schools and investment in the Pūhoi-to-Warkworth PPP motorway contract awarded last year.

Infratil said the Labour Party-led government "has something of a clean sheet on many policy areas" but in areas relevant to the company "their most clearly enunciated goals are to up the rate of infrastructure investment."

"However, it’s less clear whether the government intends going it alone or working with private partners," it said.

Infratil shares last traded at 3.22, up 0.2 percent on the day, and have gained 17 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Serious Fraud Office: Commences Enquiries Into Allegations Of COVID-19 Wage Subsidy Fraud
The Serious Fraud Office has commenced a number of enquiries into alleged abuse of the Government’s COVID-19 Wage Subsidy. Director Julie Read said the allegations relate to multiple complex cases of potential fraud that have been referred to the agency following extensive investigations ... More>>



Environment: Preliminary Environmental Data On New Zealand’s Air Quality Released Today

The Ministry for the Environment and Stats NZ have published the Our air 2021: preliminary data release today. We are currently working to revise the Our air 2021 report to incorporate analysis of the World Health Organization (WHO) 2021 air quality guidelines that were released on 23 September 2021... More>>


Statistics: Food Prices Rise For Sixth Consecutive Month
Food prices rose 0.5 percent in September 2021 compared with August 2021, mainly influenced by higher prices for grocery food and meat, poultry, and fish, Stats NZ said today. September’s movement is the sixth consecutive monthly rise. After adjusting for seasonality, prices rose 0.9 percent... More>>



Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>


Transpower: Releases Independent Report Into Events Of August 9
Transpower’s Chief Executive Alison Andrew has today released an independent report into the grid emergency of August 9 when insufficient generation was available to meet demand, leading to some customers being disconnected... More>>

Bayleys: Latest Lockdown Adds Further Fuel To Industrial Property Market

The recent construction shutdown resulting from Auckland’s Covid 19’s lockdown restrictions has put additional pressure on an industrial property market that is already struggling to keep pace with demand... More>>