Nick Loughnan contemplates the legacy of the Aurora Energy decision.
My recent trip to Dunedin followed the Otago NPC game against Auckland. The big stadium had a meagre scattering of around 1000 fans.
My mind went back 30 years to another Otago v Auckland game at Carisbrook. It was an absolute gem of a day as we drove to Dunedin from Central Otago among a very large convoy of cars, vans and buses to watch.
The sun shone brightly, the railway "Scotsman’s Grandstand" embankment was full, the family ticket cost us $24 and the local boys beat Auckland in front of a packed and jubilant crowd.
But the old ground wasn’t good enough. Despite some wise warnings that stadiums the world over run at big losses and are really a luxury for much larger cities, the persuasive influences within Dunedin resulted in the Dunedin City Council backing a new stadium.
Yes, it was an ambitious undertaking but the reality of those unheeded warnings now confronts the city council.
Worrisome debt has to be reckoned with, and Aurora Energy, as a council-owned asset, is under the spotlight.
That it diverted many millions away from its core business of maintaining an efficient and safe lines network to provide years of stadium subvention payments and council dividends has not helped its position.
Sadly for Dunedin, something, or, more correctly, someone has to give. The loss-making stadium can’t be sold, and the prospect of selling Aurora seems to be attractive.
If only it was that simple.
Again, if short-term thinking is going to rule the decision outcome, Otago people will lose again. We all use electricity and ownership of a lines network is of strategic importance.
Why else would these essential infrastructure assets be sought by international investors?
Interestingly, since Dunedin councillors recently entertained the ideas of PowerCo around such a sale, that network’s fortunes have changed.
PowerCo, a Taranaki lines network once owned by its district council, now has two Australian shareholders.
Queensland Investment Corp, with 33% ownership, wants to sell its stake to the Australian Retirement Trust which would become the new majority owner with a 58% shareholding.
So controlling ownership of another major revenue-earning asset is set to disappear from New Zealand, and PowerCo’s profits from its 300,000 consumers will benefit Australian pensioners’ lifestyles.
This regrettable situation follows a serious pattern of short-term thinking. New Zealand has sold 85% of its banks to Australians and we see an outflow of hundreds of billions across the Tasman because of this.
It is certainly no coincidence that the outlook and opportunities in this country have changed markedly in my lifetime.
As a 1950s baby, I grew up in a generation where one income was sufficient to provide for a family of three or four children. With a tax-take from a population of less than half what it is today, our governments built enough houses, schools, tertiary institutes, major roading networks, considerable power generation assets and new hospitals that today it cannot even afford to staff.
We have offered up too many of our assets to the world, and we are increasingly enslaved to debt.
Otago must retain ownership of Aurora, even if the network is to be split between Dunedin and Central Otago, and the structuring of this continued ownership through a public shareholding/trust model must be examined in detail.
Has the DCC seriously considered the options available here?
• Nick Loughnan is an Alexandra farmer.
