Job insecurity for Vector boss

By CHRIS DANIELS energy writer

After successfully leading a $1.5 billion takeover of UnitedNetworks, Vector chief executive Dr Patrick Strange has been told he must reapply for his own job.

His main rival is likely to be Dan Warnock, chief executive of neighbouring UnitedNetworks and employee of its former owner, United States energy giant Aquila.

Instead of returning to the US as first expected, Warnock may soon find himself as one of the winners from Vector's takeover of the power and gas lines company, and not one of the casualties.

Strange's position is now being advertised on the internet, with both local and international applicants sought.

It is understood the move to put his job up for competition has surprised and disappointed Vector staff, many of whom are deeply loyal to Strange.

He was one of the few senior executives of what was once Mercury Energy to emerge from the 1998 Auckland CBD power blackouts with his reputation enhanced. He has a reputation in the electricity networks business as an intelligent and popular leader.

During his time at Vector, dividends and profits have increased, while consumer lines charges have fallen. Strange is a proponent of the monopoly lines companies' having a direct relationship with electricity consumers, instead of just dealing through the power retailers.

If he fails to retain his job, it could be viewed as payback from some members of the publicly elected Auckland Energy Consumer Trust, which owns Vector and appoints its board of directors.

A sometimes acrimonious relationship has existed between some trust members and senior Vector executives, including Strange.

He has been identified as part of the faction keen on putting Vector into private hands, by means of a partial share float and subsequent stock exchange listing.

Current trust chairwoman Karen Sherry was ill yesterday and unable to comment, but a spokesman said the method of merging Vector with UnitedNetworks was a matter for the board of directors.

Recent appointments to the Vector board, including new chairman Michael Stiassny, have not clarified whether the lines company will remain entirely in public hands.

Stiassny said yesterday that the board and management of Vector had made a large acquisition and intended to "put the best of both of those organisations together to build a better one".

"We are building a new Vector which will be better than the past in either Vector or UnitedNetworks."

Stiassny said that any comment on individuals would have to come from them, but that the board hoped that both Strange and Warnock would "put their hats in the ring".

Strange would not yesterday make any comment on the requirement he apply for his job.

Yesterday afternoon marked the closing of applications from investors wanting to buy Vector's capital bonds. Vector has successfully raised $307 million in the issue, which was oversubscribed.

Owners of these bonds have been told that they will have an entitlement to an allocation of shares in Vector - "in the event of a public offer by Vector, which the company is working towards completing by September 30, 2003".

This claim is made although three of the five trust members, including chairwoman Sherry, were elected on strong anti-privatisation platforms.