KEY POINTS:
It was predictable that the voices for privatisation of public assets would be raised loudly in the wake of the conflict that erupted last December on the board of the electricity supply company Vector.
This time, privatisers have been joined by local councils keen to wind up the
Auckland Energy Consumer Trust, which owns 75 per cent of Vector on behalf of Aucklanders.
The Herald has suggested the word dysfunctional has become synonymous with the AECT and proposes it be wound up.
In private, Auckland City Council officials have gone further and proposed that once the council has control of Vector's shares they should be sold to provide funding for other council services.
This is Rogernomics at local body level and a nightmare scenario for Aucklanders.
If we take a breath and look at the privatisations that have taken place over the past 20 years then dysfunctional is an accurate adjective for most.
Telecom and the broadband debacle, Air New Zealand and the Ansett fiasco, New Zealand Rail and the $200 million maintenance disaster, the electricity sector with its mock competition between many private companies amid rapidly escalating electricity prices are a few examples.
As well as profiteering, in each case we have seen a lack of investment or long-term planning. This matters to the community but much less so to private companies. If the supply is restricted by lack of capacity then prices simply increase. The company still profits but consumers pay through the nose every time they open a telephone account or an electricity bill.
In fact, asset-stripping rather than long-term investment would more accurately describe much of the management of our essential infrastructure.
And neither is there any incentive for a private company to reduce the cost to consumers and the environment through encouraging conservation. They don't. To keep their shareholders happy, they aim to deliver the maximum volume at the highest price they can get away with.
The problem at Vector is not public ownership but the appalling decision of the AECT, with no mandate from Aucklanders, to partially privatise Vector in 2005. Instead of owning 100 per cent we now own 75 per cent.
The private/public conflict inside the Vector board came to a head last year when three directors resigned in a flurry of publicity, complaining loudly about the behaviour of the chairman, Michael Stiassny, and his close relationship with the AECT.
At one level it was a clash of personalities but at the heart of the problem is the fundamental conflict between long-term community priorities and the short-term commercial interests of private investors.
The supporters of privatisation point to the strong public appetite for shares when 24.9 per cent of Vector was floated.
But this was not demand from mums and dads. This was demand from a minority of high-income individuals keen to reap for themselves the benefits that are currently shared by all of us.
This high demand is the reason we should resist privatisation of this valuable community asset.
Why should we all not enjoy the benefits of an electricity supply company that returns its profits to those who pay the power bills that create the profit in the first place?
Why should these benefits slip out of our collective hands and into a small number of already well-greased palms?
These proposals are not coming from the community, which has opposed every privatisation forced on it.
Instead, we have a tiny number of businessmen and officials working feverishly behind the scenes to separate Aucklanders from our assets.
The way forward for Vector is for the Auckland Energy Consumer Trust to buy out the 25 per cent minority shareholders and run the operation for the benefit of all Aucklanders into the future.
Let's show we have learned some lessons from the disasters of the past.
* John Minto is spokesman for Global Peace and Justice Auckland.
