Brian Rudman: Vector about-face on no-sale promise outrageous betrayal of voters

COMMENT

If Hamlet's offsider Marcellus thought something was rotten in the state of Denmark, it's got nothing on the political festering he'd nose out if he ventured near the Auckland Energy Consumer Trust offices.

He'd need a strategically applied clothes peg to get near this particular state of unpleasantness.

In October 2000, the centre-left Powerlynk team fought and won a majority on the trust board by pledging that the trust-owned electric lines company, Vector, would not be privatised - wholly or partly - if we installed them in office.

Karen Sherry, leader of the centre-left ticket, couldn't have expressed her anti-privatisation beliefs any stronger at the time. "Powerlynk is a team of independent, concerned Aucklanders who will keep 100 per cent ownership ...

"We do not favour any change from 100 per cent community ownership. Privatisation will put profits above fairness and service."

She warned that the two rival tickets wanted to privatise Vector and emphasised "only a Powerlynk Trust will keep Vector in community ownership".

Vector consumers heeded her warning and voted a Powerlynk majority into office.

A comprehensive victory against privatisation you might have thought. I certainly celebrated it as such. So why, more than 2 1/2 years later and on the eve of another trust election, is privatisation still being entertained by the Vector board? Earlier this week came a statement from chairman Michael Stiassny that the Vector board was still considering a 24.9 per cent float of the 100 per cent trust-owned company and would probably have a decision by the end of this month.

What, you have to ask, is there to decide? The owners - you and me - voted back in 2000 against privatisation. That, surely, was the end of the story.

We backed Ms Sherry's strong line against any privatisation. We didn't say we're a bit against privatisation, and wouldn't mind our servants on the board selling off, say 10 per cent or 20 per cent or 24.5 per cent of the company. We said, No Sale, full stop.

Once surrounded by the trappings of office however, Ms Sherry quickly forgot who her friends were - and more important, who had voted her into office - and began cosying up to the rival Citizens and Ratepayers minority, and its support for a partial privatisation.

Last September, Vector sold $307 million worth of bonds to help finance the takeover of rival UnitedNetworks. Despite the election pledges, bondholders were enticed in by news that the board was "working towards" partial privatisation and if that happened bondholders would be offered shares at 2.5 per cent discount on the offer price.

As a consolation prize, if no share offer was forthcoming by September 30 this year the bond interest rate would increase from 8.25 per cent to 9.75 per cent.

When Ms Sherry was berated in this column last September for betraying her election pledges, her defence was breathtaking. She argued that because the takeover of UnitedNetworks had doubled the value of the company, then "if 25 per cent of that company [meaning the enlarged company] were to be floated that would mean the assets owned by the trust beneficiaries had increased by more than 50 per cent".

Of course you could counter that by arguing that if nothing was sold off, the beneficiaries' assets would have increased by 100 per cent. But that's not the argument Ms Sherry used during the campaign. Her arguments were philosophical and went to the core issue.

I quote her election pledge: "Privatisation will put profits above fairness and service." Even partial privatisation, she added, would mean the community giving up "control, dividends, fairness in pricing". That was the issue. Not how big anything was.

That the board continues to contemplate privatisation indicates their belief they still have a chance of pushing the proposal through the trust. Otherwise why would they bother going through the motions? With the two Citrats board members for partial privatisation and Ms Sherry's two Powerlynk colleagues remaining loyal to their election promises, against, this leaves Ms Sherry in the box seat. That just three months out from the next board election she could contemplate betraying her voters' trust on the key promise that got her elected is unconscionable.

If she can't now bring herself to oppose privatisation, she should at least have the decency to postpone any vote until after the election.

If she's so sure of her change of mind, then she should have the guts to front up to the public and seek our endorsement - or otherwise. That would be the democratic way to go.

* Talking of 180 degree turns, I'm glad to see Britomart stationmaster Martin Gummer is to let Tourism Auckland into his train station after all. This is the man who pledged not to bow to political pressure over his ridiculous decision to ban the publicly owned agency from the new transport centre.

If it wasn't political pressure, let's put his change of mind down to a gust of common sense drifting past his ticket box.