KEY POINTS:
Overseas buyers believed to be bidding for part of Vector's electricity network could be affected by the Government's surprise recent clamp on foreign ownership of strategic assets - but Finance Minister Michael Cullen is staying silent on whether they will be.
Vector, which is 75 per cent owned by the Auckland Energy Consumer Trust, has since last year been considering selling its Wellington electricity network in a deal thought to be worth about $1 billion.
A report in the South China Morning Post paper this week suggested three bidders were in the frame - one a Chinese Government business, the State Grid Corporation of China.
But in a week when New Zealand has signed a free trade agreement with China, it is unclear whether any of three foreign bidders left in the race would be welcomed by the Beehive.
Uncertainty centres on the Cabinet's decision last month to change foreign ownership regulations to give greater protection for "strategically important infrastructure" on sensitive land.
The move was aimed at a Canadian bid for part of Auckland International Airport.
Senior ministers Clayton Cosgrove and David Parker will decide on that deal this week.
the Government has refused to say what other assets it considers to be strategically important, and yesterday Dr Cullen was no clearer when asked about the potential Vector deal.
Any of the bidders left - reported to include the Chinese company, an Australian partnership and a Hong Kong company - would have to apply for approval to make the buy under the Overseas Investment Act.
Dr Cullen said: "That's a matter that would have to be considered by ministers who were going to undertake that decision if an application is ever made."
He then said: "The Vector network isn't exactly the same as Auckland."
Asked if it was not regarded as strategic infrastructure, Dr Cullen said: "I'm not going to say that.
"I'm saying it's not exactly the same as Auckland Airport, which is by far the largest single piece of strategic infrastructure in the country."
Dr Cullen then said he would not prejudge the situation, particularly because he may be a minister involved in making an approval decision on that deal.
The Herald later spoke to a source with close knowledge of the Overseas Investment Act who said it was not clear whether Vector's Wellington network would fit the description of strategically important infrastructure on sensitive land.
New Zealand First leader Winston Peters referred to his party as the "gatekeepers" of assets such as Vector and said they should be retained in New Zealand hands.
