Provided by NZX
  • MRP2.41

    $0.010.41%

  • Open 2.42 High 2.42 Low 2.4 Bid Price 2.4

    Offer Price 2.41 Value 245908.37 Volume 101540

Current as of 18/09/14 01:20PM NZST

Adam Bennett

Adam is a political reporter for the New Zealand Herald.

Shares could be held back for Treaty claims - English

Mighty River will be the first of four state-owned power firms to be part privatised. Photo / Supplied
Mighty River will be the first of four state-owned power firms to be part privatised. Photo / Supplied

The Government may hold some shares in the power companies it plans to partially privatise in reserve, or even buy some back on the market to settle future Treaty claims by Maori, Finance Minister Bill English says.

With the Government's "mixed ownership model" legislation set to pass this afternoon, Prime Minister John Key this morning again said litigation remained a potential hiccup in the plan to sell shares in Mighty River Power before the end of September.

That risk to the plan to sell up to 49 per cent of Mighty River Power, Genesis Energy, Meridian Energy comes chiefly from a urgent Waitangi Tribunal hearing.

The hearing will deal with a claim by the Maori Council and 11 others that the sales breach the Treaty and a more general claim that the Crown has denied or violated rights over freshwater and geothermal resource, and is due to take place on July 9.

However, Mr Key said the risk was not significant.

"The Government's view is there's no merit to any litigation and that issues of water that sit at the heart of any potential litigation have been well and truly covered off through lots of other things we're doing."

However Central North Island iwi Ngati Tuwharetoa has also indicated it is considering legal action over the sale plan and Mr Key confirmed Mr English had met with them to discuss their concerns.

Tuwharetoa say that as legal owners of the lakes and rivers used by Mighty River and Genesis, including Lake Taupo and Lake Rotoaira and the upper Waikato River, they are concerned about privatisation of electricity generation operations on their waterways without being given any say in the matter.

"The [mixed-ownership] model expressly enables the privatisation and consequential commercialisation of schemes that were previously operated in the national interest," Ngati Tuwharetoa paramount chief Sir Tumu te Heuheu told the parliamentary committee considering the mixed ownership model bill last month.

"That fundamental change means that we need to revisit the operation of these schemes upon our lakes and rivers."

Mr English said this morning that Ngati Tuwharetoa were taking a " very responsible approach" to their claims in recent discussions but it was possible the claims could be tested in court.

He said Ngati Tuwharetoa's claims were "strongly held" with a sound historical basis.

"As you get down the track there will be some kind of settlement which generally involves some cash, or involves the transfer of some Crown assets to them.

"It's possible that in context as part of their Treaty settlement they may be interested in shares in energy companies because they live with the assets.

"We certainly don't rule that out but in the shorter term we're more interested in making sure the Crown understands their claim and isn't trying to get around the claim by using the sale."

Mr English wouldn't rule out holding shares in Mighty River and Genesis aside to address a future settlement with Ngati Tuwharetoa, a proposition previously dismissed by State Owned Enterprises Minister Tony Ryall.

However Mr English repeated Mr Ryall's contention that it was possible the Government would repurchase shares on the open market for that purpose.

The Mixed Ownership Model set to have its third reading debate before being passed this afternoon an event which will be marked with another protest in Parliament grounds by opponents of the sales plan.

Mr Key yesterday said the referendum on the asset sales policy opposition parties and others are seeking by way of an ongoing petition was not likely to be completed until after the three power companies had been partially privatised.

But Labour leader David Shearer this morning said while that might be the case, the referendum was not a fruitless exercise because it could halt more sales in the future.

"It sends a message to the Government of just how opposed people are to this legislation going through."

He said he believed the Government were worried about the referendum.

"Because the referendum will be held some time next year, probably toward the end of next year - it will go convincingly against them and will be in the lead in to the 2014 election not to mention the local body elections at around the same time."

He said Mr Key's comment that the public did not fully understand the asset sale plans and the companies involved showed the Government had failed to properly inform them.

"I think they've intended to keep this as cloudy as possible. The fact they don't know very much about these companies is not surprising. I would imagine the Government does not want to advertise that these are our best performing assets in New Zealand and they are likely to be snapped up by overseas buyers who are looking for a real bargain."

Asked whether being able to buy shares through banks or online would make it easier for people to invest, Mr Shearer said the majority of New Zealanders would not have the money to spare to buy into the assets.

He said Labour would halt any future sales if it was in Government after 2014, but he could not promise to buy back shares that were already sold.

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a3 at 18 Sep 2014 13:25:15 Processing Time: 461ms