Clusterf**k In The Commerce Committee Room | 500 Words

Friday, 8 March 2013, 9:57 am
Column: Alastair Thompson

Clusterf**k In The Commerce Committee Room | 500 Words

After listening to National Radio this morning - and then chatting with Vernon Small @VernonSmall (See… Stuff: Elder still on $1.3m) at Mojo Coffee Cartel it is apparent that yesterday's commerce select committee meeting circus is going to become seriously problematic for this Government.

Three SOEs at the center of the Government's flagship MOM energy company sell-down are effectively in disarray.

Meanwhile electricity consumers are facing across the board 5% rises in the price of electricity.

It is hard to imagine how the MOM sales process might have been better sabotaged from a media perspective had you tried to plan it.

While Solid Energy may have been dropped from the MOM sales team - what happened there reflects on the processes which govern our SOE's. The three energy SOEs are monitored and supervised by the same people, their directors are appointed by the same processes. We had been under the impression that this stuff was being done well.

But on the basis of yesterday's performance State Owned Enterprise Minister Tony Ryall can now be expect to be dragged into the frame to answer questions about the accountability and governance standards for Government SOEs. What happened at Solid Energy looks to have been monumentally foolish. And that came to a head at yesterday's select committee when the Government's plan was revealed for dealing with it - get the chairman to stonewall questioning.

But what makes this far more remarkable is that it has happened in the very week that the first of team MOM - Mighty River Power - has commenced its sales process.

On Tuesday and Wednesday more than 200,000 people pre-registered to purchase shares in Mighty River Power.

These people are legitimately interested in whether the companies they plan to stick their savings into.

They need to know that they are not being run by muppets of an ilk of those that appear run Solid Energy (Don Elder & "Hospital Pass" Mark Ford).

But the implications do not stop there.

As well as being chair of Solid Energy Mark Ford (ex Watercare Services and Auckland Transitional Authority) also chairs the Christchurch Development Unit. There he is at the heart of the business decisions behind the multi-billion rebuild of Christchurch.

And there he works very closely with Gerry Brownlee. And that creates issues for the Government because as the facts about Solid Energy emerge Gerry Brownlee is likely to loom large.

To be fair to Ford he was brought in to sort out Solid Energy as a fixer.

And on the basis of what I have heard of his stand-up interview with media after yesterday's select committee hearing, he is doing his best of a very bad lot.

However to the public he looks as if he is protecting the organisation from democratic scrutiny when actually it is his political masters the heavily whipped select committee - and the SOE Ministers who are doing that.

And as more than $400 million and thousands of jobs are at stake here this is seriously problematic in terms of democratic accountability.

And so this is one of those stories which is fast getting away on its actors.

This morning Felix Marwick @felixmarwick tweeted saying:

Solid Energy chair says former CEO Don Elder is allowed to talk to media. Contradicts Dr Elder's claim that he's not allowed.

— Felix Marwick (@felixmarwick) March 7, 2013

Which is not saying that Don Elder will talk. Presumably that is why he is continuing to be paid his salary - Mark Ford is not in charge of everything because he is foolish.

However I hope Don Elder does talk. I for one want to know what really happened here.

But was just the highlight of yesterday's Clusterf**k in the Commerce Select Committee.

Context Matters - Tony Ryall's Three Other Headaches

As if to rub salt in the SOE Minister's wound, the day also saw huge 5% across the board price rises being announced by Genesis Energy and Contact Energy for the price of electricity around $100 per household per year.

The increases by increases in another SOE's capital cost-recovery also reported and announced as part of yesterday's big day in the Select Committee room. Transpower is commissioning massive much-needed upgrades to the grid and the cost of them will be recovered from consumers.

On the face of things the timing could not be more terrible.

The very same tax paid dividend that you may expect to receive on a $2000 investment in Mighty River Power looks to be roughly exactly what you will need to pay the average price rise on all NZers household power bills.

It seems unlikely that this will escape the notice of the public.

And as the other SOE's appeared there was much, much, much more.

It appears that there was no communications plan for the day. No pep-talk from the coach telling everybody to behave themselves.

Which is odd given that there is a cast of thousands working on the MOM sale and these organisations are all in the center of this. Did anyone even know what was in each of the SOE's briefing notes.

Mighty River Power who were expected to be the highlight of the day had taken the best advice, but turned up without a clue.

The Chairman and CEO turned up as if on a horse packing steel. Their plan was to effectively goad the opposition by electing not to answer the questions they were asked. The problem with this being that while they remain in Government hands they remain subject to Government and parliamentary scrutiny. Among all the SOE's you would have expected them to be the best behaved - not the worst.

It must have escaped someone's - no doubt very highly paid - attention that the process of going into an IPO is one of "extreme transparency" and "trust building".

And then Genesis - which is widely expected to number be the second up MOM on the block - also experienced extreme embarrassment.

The chair of Genesis is former National Party Prime Minister Jenny Shipley whose background is worth remembering.

Now - as well as being chair of Genesis - Shipley is tarnished. She is a former director of collapsed construction company Mainzeal (where she resigned just days before the collapse of the building company).

It is often said that a lot can happen in a short time in politics. Yesterday was one of tectonic days - it will be interesting to see where the pieces fall.

I am sorry I missed it but I am delighted that my colleagues in the Press Gallery seem to have reported it so gallantly.

- Alastair Thompson | 500 Words 8/03/2013 9:36:59 a.m.

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Alastair Thompson

Scoop Publisher

Alastair Thompson is the co-founder of Scoop. He is of Scottish and Irish extraction and from Wellington, New Zealand. Alastair has 24 years experience in the media, at the Dominion, National Business Review, North & South magazine, Straight Furrow newspaper and online since 1997. He is the winner of several journalism awards for business and investigative work.

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