Editorial: Invercargill quote catches Key out

20:40, Feb 26 2013

So was it the Government being straight-faced, brave faced or two-faced when it was talking up Solid Energy's (it turns out) disastrous expansion programme in Southland.

Prime Minister John Key was asked at this week's Parliamentary press conference whether the Solid Energy board, as it pressed ahead so ambitiously into new projects, might have been reading the signals forwarded by his own Government.

He did not. Instead he pointed out the board had been working on a raft of alternative investments under the previous Government.

[Mr Key declined to mention, understandably enough, Gerry Brownlee's "Sexy Coal" video clip in 2008.]

Only now does he acknowledge his Government had real concerns by 2009. In fact, he says it did not agree with Solid Energy's massive expansion programme. It had turned down a requested $1 billion injection and held a series of "very robust discussions" with the over-reaching company which was "spiralling out of control".

The Government didn't act emphatically because, apparently, these discussions weren't quite so robust that the extent of the spiral became apparent to the Government, what with the company's balance sheet looking so pretty, and coal prices being so high, at the time.


Not that the Government could do terribly much by way of exerting any control in any case, at least by Mr Key's account. Unhappy as it was, the Government saw no grounds to dump the board.

All of these concerns about this publicly owned business were regarded as none of the public's business, of course.

In fact, the background account we now have makes troubling contrast with what was going on in public during public meetings and photo opportunities.

Mr Key fronted up to an Invercargill audience in June 3, 2011, and said: "At the moment companies like Solid Energy are growth companies and we want them to expand in areas like lignite conversion."

Deputy Prime Minister Bill English, turning the first sod for Solid Energy's $25 million briquetting plant in September 2011, said there were huge opportunities for further development. The challenges should not be underestimated, but the social benefits should not be overlooked either, he said.

A couple of months later he was assailing the Labour Party's plans to put the brakes on lignite conversion projects in the Gore district, should it win the election. He said the projects would need to pass commercial and environmental tests, but if they did it could provide more jobs, higher incomes and real benefits to Eastern Southland and New Zealand.

Now the Greens are sensing blood, or a less carnivorous version of it anyway. They charge that the Government encouraged Solid Energy's plans without requiring it to submit a business case.

Maybe on the one hand the Government was encouraging, in the most general and unspecific spare-me-the-details way, an expansion into ventures like alternative uses for lignite, while on the other it was impotently dismayed at the methodology and scale of the projects.

In any case it's not just the different hands, but also the different faces, that people are liable to be frowning over.

The Southland Times