28 March 2013

Asset sales in crisis as Tiwai smelter's future in doubt

It is reckless for National to ask New Zealanders to buy into Mighty River and the other electricity SOEs in light of the turmoil over the Tiwai Point smelter, Green Party Co-leader Dr Russel Norman said today.

The future of Tiwai Point aluminium smelter is in doubt after Meridian Energy announced that contract talks have broken down. This follows the departure of New Zealand Aluminium Smelters general manager Ryan Cavanagh last week. Tiwai Point consumes up to 15 percent of the country’s electricity. If it closes, that electricity will flood the market.

“How can John Key ask Kiwi mums and dads to put their hard-earned savings into an electricity company at a time like this? With the very real risk that Tiwai Point will close, no-one can sensibly assess the value of investing in a power company,” said Dr Norman.

“Likewise, how can the National Government sensibly assess the business case for proceeding with the sales when the future price of electricity and value of the electricity companies is so uncertain?

“The only reason National would push ahead with asset sales now in light the chaos on the electricity sector is if ideology trumps common sense.

“It should never have come to this point. The National Government should have been involved in brokering an agreement from the start. They should have been working to get the exchange rate down so that exporters like Tiwai Point remain competitive. Instead, they have been asleep at the wheel.

“Now, over a thousand jobs and a billion dollars’ worth of manufactured exports are on the line, and the asset sales programme is in crisis thanks to National’s economic mismanagement,” said Dr Norman.

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