'Pragmatic' Ngati Porou oppose asset sales - but want a slice
BUSINESSDESK: Te Runanganui o Ngati Porou, the country’s second-biggest iwi, opposes the government’s plan to sell 49% of state-owned energy companies but wants a slice of the action if the proposal goes ahead.
The iwi isn’t keen on the plan to sell stakes in MightyRiverPower, Genesis Energy, Meridian Energy and Solid Energy, but “we’re just being pragmatic,” chairman Apirana Mahuika told Parliament’s finance and expenditure committee.
“If it does go ahead, we need to protect ourselves.”
The committee heard oral submissions from 45 opponents to the Mixed Ownership Model Bill today, with more than 1400 submissions received in total.
No oral submitters supported the partial privatisation plan.
However, if the bill is passed, Ngati Porou wants the 10% ownership threshold removed so consortia of iwi can build up a stake.
Lawyer Matanuku Mahuika said the threshold was arbitrary, and if the government is serious about getting Maori investment it should let those consortia buy bigger stakes than what is on the table.
Any decision on whether to participate will depend on the price and return, he said.
Ngati Porou also wants the government to retain board representation to “exert some level of influence through the people it appoints”, Mr Mahuika said.
That may have an impact on the valuation of the shares when they are sold, but that is the kind of trade-off that has to be made, he said.
Earlier in the day, Geoff Bertram from the Victoria University Institute of Policy Studies said regulatory arrangements for the electricity system were failing and needed to be fixed before contemplating privatisation.
Describing the last 20 years of electricity reforms as a “circular process of price-gouging”, he said there were opportunities to implement progressive power pricing to alleviate energy poverty.
“Privatisation is a normal thing,” he told the committee, but not if it was pursued without good regulation.
Several submitters said they feared the partial privatisations would freeze in place the current market-oriented regulatory model for electricity.
Energy campaigner and spokesperson for the Domestic Energy Users Network, Molly Melhuish, provided analysis showing private sector power companies charged higher prices than most of their state-owned counterparts.
Privately owned TrustPower had the highest charge of 29.02 cents per kilowatt hour, while the lowest private tariffs were charged by Todd Energy’s Nova, at 24.76 cents.
State-owned MightyRiverPower – the first generator-retailer in the queue for partial sale, later this year – charged 25.77 cents per Kwh under its Mercury brand, according to the February 2012 MED quarterly survey of electricity prices.
Two MRP subsidiaries also charged rates above 26 cents per Kwh.
The lowest price retailer in the MED survey was Genesis Energy subsidiary, Energy Online, at an average 23.63 cents per Kwh.
Public Service Association national secretary Richard Wagstaff also opposed the bill, but if it proceeds urged the committee to reinstall employer obligations of the partially-owned companies to appoint people based on merit.
“Many businesses operating in the private sector recruit staff from relations and friends and don’t go through the same level of transparency as the New Zealand public service,” he said.