Call for partial float of state-owned generators

The call went up for partial privatisation of state-owned power companies at the TrustPower annual meeting yesterday.

Chairman Bruce Harker said all companies in the industry needed to be under relentless pressure to use capital well and have low operating costs.

"Given the now solid structure and competitiveness of the market, it is time for us as a country to ask 'why not' in respect to a 20 per cent partial float of the generator state-owned enterprises," Harker said.

Control would be solidly retained by the Government and the companies could not be taken over or merged through the actions of others.

"But what we will have is listed share prices, and along with that, we will have the relentless pressure and judgment of investors and analysts.

"Over time companies that are less efficient in their use of capital or their operating costs will be judged for that by the market," Harker said.

TrustPower is 50.5 per cent owned by New Zealand infrastructure investor Infratil, and 33 per cent owned by Tauranga Energy Consumer Trust. It has 13,000 small shareholders.

State-owned generators include Mighty River Power, Meridian Energy, and Genesis Power.

Solid Energy chairman John Palmer copped criticism when he called for the partial privatisation of the state-owned coal miner last month.

Energy Minister Gerry Brownlee said Palmer was expressing a personal view which was "certainly not the Government's view".

"I think he has just stepped well over the mark," Brownlee said.

The National-led Government has ruled out privatisations of state assets in its first term.

TrustPower board member Geoff Swier is an adviser on privatisations and played a leading role in Victoria's electricity reforms. He is a former adviser to Sir Roger Douglas.

- NZPA