28th April 2008

Wellingtonians will lose as strategic asset sold to Hong Kong

It is tragic that yet another strategic asset, Wellington's lines company, has fallen into foreign control, meaning Wellingtonian's can only loose out, Green Party MP Sue Kedgley says.

"I predict even more expensive power bills for Wellingtonians as the new foreign owners - Cheung Kong Infrastructure - seek to make a profit on their $785 million investment.

"I expect the new Hong Kong based owners will run down Wellington's electricity network, suck out profits for their offshore shareholders with minimum maintenance for the end users - Wellington residents, and use the network as a cash cow.

"I also predict they will sell it off again in a few years time for a hefty profit.

"Our electricity lines are a key monopoly asset bought and paid for by ratepayers. Wellington City Council should never have sold our lines company, Capital Power," Ms Kedgley says.

Ms Kedgley points out that lines companies are permitted to earn a profit, and so a high price for the sale of our electricity lines will almost inevitably result in increased electricity charges for Wellingtonians.

"If someone pays a high price for the asset, this entitles them to raise prices."

Ms Kedgley says that power prices have already gone up by 600 percent in the past decade with no actual investment in new infrastructure in that time.

"We have been victims of a commercial game of pass the parcel ever since, with the lines company changing hands at least three times since then.

"Why is our Superannuation Fund not bidding for ownership of New Zealand strategic assets like our electricity lines, rather than investing in companies which make cluster bombs? Surely it's in the National interest to own our energy networks, not allow them to fall into foreign control?"

ENDS

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