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Call goes up again for partial privatisations

Fuseworks Media
Fuseworks Media

Wellington, July 30 NZPA - The call went up for the partial privatisation of state-owned power companies today at the TrustPower Ltd annual meeting.

Chairman Bruce Harker said all companies in the industry needed to be under relentless pressure to use capital well and to have low operating costs.

"Given the now solid structure and competitiveness of the market, it is time for us as a country to ask 'why not' in respect to a 20 percent partial float of the generator state-owned enterprises," Dr Harker said.

Control of the enterprises would be solidly retained by Government and the companies could not be taken over or merged through the actions of other.

"But what we will have is listed share prices, and along with that, we will have the relentless pressure and judgment of investors and analysts.

"Over time companies that are less efficient in their use of capital or their operating costs will be judged for that by the market," he said.

TrustPower is 50.5 percent owned by New Zealand infrastructure investor Infratil, and 33 percent owned by Tauranga Energy Consumer Trust. It has 13,000 small shareholders.

State-owned power generators include Mighty River Power, Meridian Energy, and Genesis Power.

Solid Energy chairman John Palmer copped criticism when he called for the partial privatisation of the state owned coal miner last month.

Energy Minister Gerry Brownlee said on Radio New Zealand that Mr Palmer was expressing a personal view and the Government had no information that it was a Solid Energy board position. His view was "certainly not the Government's view".

"I think he has just stepped well over the mark," Mr Brownlee said.

The National Party-led government has ruled out privatisations of state assets in its first term.

Wellington-based Infratil and its manager Morrison and Co were reported this week to be leading a consortium bidding for Port of Brisbane, which is being privatised by a state Labor Party government in Australia.

TrustPower board member Geoff Swier is an adviser on privatisations and played a leading role in State of Victoria electricity reforms. He is a former adviser to Sir Roger Douglas.

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