Dams, mines, power stations at risk: Greens
Foreign companies will be able to have complete ownership of key infrastructure, including coal mines, dams and power plants under the Government's asset-selling legislation, the Green Party says.
Greens co-leader Russel Norman said the legislation opened the way for wholesale "asset stripping", similar to that which occurred following the privatisation of State-Owned Enterprises in the 1980s and early 1990s.
He spoke after the release on Friday of the Commerce Select Committee's report on the 2010-11 financial review of Solid Energy where its chairman, John Palmer, said 100 per cent of holdings in subsidiary-held infrastructure such as power plants and dams could be sold offshore.
Further documents provided by the Green Party highlighted the vast level of infrastructure held by the four SOEs – including numerous power stations, geothermal plants, wind farms and the Spring Creek Mine.
"When you look through that list you realise how easy it is to sell them all off ... you realise what a real and present danger it is," Norman told the Sunday Star-Times.
"The Government hasn't been at all clear or upfront about that [selling subsidiaries], about how simple it is.
"They have tried to be unclear about it or say it is a hypothetical thing.
"Clearly, the head of Solid Energy told the select committee that is exactly what he planned to do."
State Owned Enterprises Minister Tony Ryall did not respond to a series of written questions provided by the Star-Times.
The Government revealed last year that it would sell up to 49 per cent of shares in four State-Owned Enterprises – Solid Energy, Mighty River Power, Genesis Energy and Meridian – plus a further stake in Air New Zealand.
It said last week that, "market conditions permitting", shares for Mighty River Power were expected to be available late this year.
Norman said that although he was disappointed by the Government's failure to have previously spoken of the possibility of selling off individual dams, power stations and mines, he was "not surprised".
"They know how unpopular this privatisation programme is," he said.
"They have gone to great lengths to try and cover up the truth about what is going on.
"Time and again they have downplayed the likelihood of this happening."
Revelations about how overseas corporates can purchase 100 per cent ownership of SOE subsidiaries come as China looks to buy up key energy, dairy and food infrastructure around the world.
China has already bought up large in the Indian and European energy sector, with Norman warning the same could happen in New Zealand.
"Big Chinese sovereign wealth funds are very interested in infrastructure," he said. "Fair enough for them ... they are doing exactly what makes sense to them, invest in infrastructure, long-term returns, and they get to turn a whole lot of cash into really good investments.
"It makes really good sense to them but it would be a disaster for us."
Norman said New Zealand energy consumers would be left vulnerable.
"It would mean [the investors] would be in a position to drive up the price of power. It is a real problem."
Last Thursday the Government launched a new website in a bid to educate New Zealanders on its proposed partial SOE sell-off.
It explains that the Government expects Kiwi investors will be at the "front of the queue for shares" and will ensure no investor is able to own more than 10 per cent of each company.
"With New Zealand's debt going from $50 billion today to $72 billion in three years' time, New Zealand needs to control debt," Ryall said.
"We expect to receive $5 billion to $7 billion in proceeds, which will help control debt and allow us to build new schools and hospitals.
The programme will also reinvigorate the capital markets and bring stronger commercial disciplines to each of the mixed ownership model companies."
- © Fairfax NZ News
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