KEY POINTS:
The Government's decision to allow Chinese investors to acquire Vector's Wellington lines business is hypocritical and flies in the face of its move to block Canada's pension fund bid to buy a stake in Auckland airport, the New Zealand Shareholders Association says.
Yesterday, Finance Minister Michael Cullen gave the Government's seal of approval to the deal which will see Cheung Kong Infrastructure Holdings and Hong Kong Electric Holdings jointly acquire the shares of the Vector Wellington Electricity Network for $785 million.
Cullen said the buyers had met all the Overseas Investment Act criteria relevant to a significant business asset and, unlike the failed Auckland airport deal, it did not involve sensitive land.
"As a result, none of the national interest tests that were the subject of discussion over Auckland International Airport earlier this year applied in this case."
The Canada Pension Plan Investment Board's bid to acquire 40 per cent of the airport received the approval of shareholders but was blocked by the Government in April.
Shareholders Association chairman Bruce Sheppard said he saw little difference between the two deals.
"If the Canadians weren't good enough to own an asset, and that was only 40 per cent, how come the Chinese are good enough to own 100 per cent of an asset?"
He said he doubted the Chinese would bring any further experience or jobs to the Vector business - factors that were sticking points in the airport acquisition attempt.
"They will simply harvest the revenue and take it offshore. There is absolutely no difference economically."
Sheppard also questioned the sensitivity of the airport land versus the Wellington lines land.
"What is significant about a piece of mudflat in the middle of a harbour that is completely landlocked? The power business is a whole bunch of powerlines and cables strewn across Wellington - each of those have easements over land - there are some that go over the Beehive itself."
Sheppard said the decision opened the door to further deals by the Chinese who were unlikely to want to sell any of the assets back to New Zealand.
