Labour, Greens concerned at SOE contract moves

LOUISE RISK
Last updated 12:38 15/08/2012

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Labour and the Green Party are concerned private companies are using the potential sale of state-owned enterprises as leverage to drive contract prices down, potentially causing job losses and hurting corporate reputations.

The comments come amid reports that more than 200 jobs could be at risk if state-owned-enterprise Huntly East coal mine cannot re-secure its biggest contract. Owner Solid Energy confirmed on Monday it was in the process of renegotiating the mine's contract with New Zealand Steel's Glenbrook mill, where the majority of the mine's coal is sent.

But the Waikato Times understands the contract is at risk of being lost to an Indonesian supplier.

Green Party spokesman for energy Gareth Hughes said he hoped NZ Steel would be a “good corporate citizen" and keep the contract in New Zealand, but said they could easily be using National's proposed partial privatisation of Solid Energy as a bargaining tool.

Mr Hughes was also concerned about the potential loss of jobs in Huntly.

"The unemployment rate is 6.8 per cent - the worst it's been since 1994."

Mr Hughes said if the contract was lost, the 200-plus jobs would "essentially be being lost to Indonesia".

He said the Green Party did not support the opening of new coalmines, nor some of Solid Energy's mining practices, but they would rather see Glenbrook use locally-sourced coal from Huntly than see "high emission coal brought into New Zealand".

Labour's spokeman for SOEs, Clayton Cosgrove, shared many of the Green Party's concerns, and said it was "a slap in the face" for the workers in Huntly East that National would not comment on the matter.

Mr Cosgrove agreed NZ Steel could be using the potential partial sale of Solid Energy as leverage against them. He said the situation supported the view of his party and “80 per cent of New Zealanders" that no SOEs should be sold.

If Solid Energy loses the contract, "it will be 250 lives down the gurgler.

“Is this the brighter future John Key promised the people of the Waikato, the people of New Zealand?"

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- © Fairfax NZ News

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