Written By: - Date published: 7:29 am, October 24th, 2013 - 143 comments
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What a disaster. Meridian has attracted only a quarter of a the so-called ‘mum and dad’ investors expected (and these ‘ordinary Kiwis’ put in $18,000 each on average). The sale raised a $1.2 billion less than National thought it would. And the cost, which was meant to be $100-$120m for the entire sales process, is now over quarter of a billion after just two sales. You’ve got to tell National to stop.
National’s trying to blame it on Labour and the Greens because they did the right thing and informed the public of their plans for cheaper power before the asset sales started. But let’s just get this straight: the decision to sell was National’s. If they don’t think they’re getting the price that they should for the sales, then they should stop them.
NZ Power has been public for six months (and the public love it), blaming it and other market conditions for the terrible result of the Meridian sale is illogical. If things are that bad, don’t sell the bloody thing and save the taxpayer a pile of cash.
Speaking of cost, the Greens’ Costwatch puts the total cost of the sales process before Meridian at $173m. The ‘buy now, pay later’ scheme will add another $50m in what is basically an interest-free loan to the rich and institutions. On top of that, the middlemen will gobble up another $40m. That takes the total cost so far to over quarter of a billion dollars. The sales were meant to cost 2% of revenue – it’s 7%. And it will just get worse and worse as dividends get paid out that should have gone into the public coffers. Already, we’ve lost $49m on Mighty River’s first dividend.
You’re going to get your chance to send National a message in the coming referendum. Make sure they hear it loud and clear.