Huge investment for non-renewable lease

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Opinion

Re: Eastland Group powers to profit of $20.1m, July 2 story.

More good news from Eastland Group — a glowing end-of-year financial report and not a negative word.

Not so much from the electricity sector this year. Much more about the triumph of TOAM (Te Ahi o Maui), the geothermal investment in Kawerau.

From owner Eastland Community Trust’s annual financial statements (page f-23), as at 31 March 2019, $149 million was spent by us (ECT/Eastland Group is community owned) on establishment costs.

This investment will be open for discussion by us beneficiaries (anyone with a power bill) at the AGM tomorrow night at the Waikanae Surf Life Saving Club. All councillors should be there as they appoint the trustees, with the exception of the Mayor. The Mayor is a full member, and his replacement will be appointed by the community in the coming October election.

I hope one of the councillors will ask this question: “When does the lease of the Ahi o Maui site end?” This important fact is not touched on in the otherwise fulsome newspaper report.

The ECT financial notes, however (page F23), say the commencement date of the plant “was determined by the directors of the Eastland Group” as 1 November 2018. Careful attribution there.

Did the auditor check the actual commencement date as per the lease document? I am guessing the auditor did not because otherwise they would have relied on the document, not this note about the directors’ decision.

The point is that a lease of Maori land cannot exceed 60 years and more importantly such a lease cannot be renewed. This will be why, presumably, the notes also say “site restoration costs of an estimated $4.5 million have been included in the value of the plant”.

Site restoration costs! Who, I ask, would spend $149 million on a non-renewable lease? Could this be another reason for the departure of the four Eastland Group directors in May?

Winston moreton