Minister defends Government's handling of power crisis

State Owned Enterprises Minister Mark Burton says the Government acted correctly during the power crisis and ministers did not exceed their legal powers over SOEs, as laid down in the Companies Act and the SOE Act.

Burton told the Business Herald that the recent winter months presented "extraordinary circumstances".

"The Government made it clear to the whole electricity generation industry that it expected a wide co-operation in the industry to help overcome a potentially serious supply issue," he said.

Asked why the Crown Company Monitoring Advisory Unit was not given enough time to analyse the $800 million Genesis-Solid Energy coal contract, Burton said it had sufficient time.

"If officials felt that there was any cause for shareholders to be concerned over the terms of the contract then further information would have been requested from the companies, and officials would have undertaken a more extensive analysis of the details of the contract."

He said it was the responsibility of Genesis and Solid Energy's boards to satisfy themselves on the transaction.

On the issue of buying "uneconomic fuel" for Genesis to burn at Huntly, Burton said this was considered as a way to boost generation at a time when the supply situation was "becoming potentially dire". Since it was defined as "uneconomic fuel", this meant its purchase would have been made in "the national interest" and not to support an SOE.

In any case, no such fuel was bought or needed.

Asked if he had confidence in the management of Solid Energy and Genesis, Burton said: "Responsibility for management lies with the boards."