Asset-stripping

Back in the 90's, the government privatised Telecom. The new owners immediately ramped up dividends while underinvesting in new technology. The result was a second-rate phone network. It was a similar story with Tranz Rail: high dividends, deferred maintenance, and an enormous bill to repair the rail network once the foreign owners had run it into the ground.

Now Mighty River Power is signalling that its new foreign owners can do the same to our electricity system, raising its dividends to 110% of profits to provide them a quick buck for stealing a public asset. Its a political decision of course, to make the sale a "success" (for the buyers). And the result will be the same as that seen in earlier cases: the company will be asset-stripped and run into the ground, while the thieves laugh all the way to the Cayman Islands.

The New Zealand government should not be encouraging this behaviour with regards to our electricity infrastructure. But with National, its all about quick profits for their mates. Whether we have a functioning electricity system in ten or twenty years time simply doesn't come into it.