NZ coal industry

Economic sabotage by NZ gov't

Bill English 'setting Solid Energy up to fail'

Voxy,

9 May, 2013

Solid Energy’s chairman Mark Ford says the company has a good future - a contradiction of Bill English’s apparent attempts to hand the company to the liquidators, says Labour’s SOEs spokesperson Clayton Cosgrove.

Solid Energy’s chairman Mark Ford says the company has a good future - a contradiction of Bill English’s apparent attempts to hand the company to the liquidators, says Labour’s SOEs spokesperson Clayton Cosgrove.

"Bill English yesterday openly questioned Solid Energy’s future. That must have come as news to Mark Ford who said unambiguously: ‘there's a good future for the business’.

"Bill English has all the information. He would have known Mark Ford’s views. Yet he still came out on the day of 105 job losses to declare ‘we're not going to create a business that doesn't exist just so we can subsidise it’.

"That says to me that Bill English wants Solid Energy gone. He can’t sell it, because he claimed last year that the company was effectively worthless. Rather than admitting that might not be the case he’s going to put it on the scrapheap.

"Bill English is undermining Mark Ford’s efforts to get Solid Energy back on its feet. He should stop playing politics, take responsibility for his role in the company’s failure and start turning it around.

"This is a disgrace. Over 500 people have lost their jobs and the company is $389 million in the red. Just months ago Bill English assured New Zealanders he would not let the company fall over. Now he’s changed his mind and that has a huge impact on the 1700 people will still have a job in the company.

"National had years of warning about Solid Energy’s troubles but it did nothing. Ministers received month to month reports that said the company was in deep financial strife but these same ministers were asleep at the wheel. Now the taxpayer and employees are paying a huge price for that lack of Government oversight and scrutiny.

"Bill English needs to put a stop to this uncertainty and tell New Zealanders and staff at Solid Energy what’s going to happen," says Clayton Cosgrove.

The original item to which these comments refer is here:

English questions viability of Solid Energy

Finance Minister Bill English has questioned the viability of Solid Energy as he considers a host of State-owned companies facing financial difficulties.

Radio NZ,

8 May 2013

Learning Media, which produces educational material, is the latest to join the list of struggling SOEs. It says a range of challenges is affecting the sustainability of its business.

Mr English said the Government owns a number of companies precisely because they do have difficulties.

He said the Government will not necessarily prop up failing businesses - but the only one where there's a question about its viability at the moment is Solid Energy.

Solid Energy has debts of about $400 million. New Zealand Post also faces challenges.

Mr English said the Government is prepared to help SOEs which it thinks have a sustainable future. He said KiwiRail is one example.

Richard Norman, a professor of management at Victoria University, said Mr English is sending a message to other state-enterprises to clean up their shop and telling them not to take the Government's support for granted.

Professor Norman said Solid Energy would not be the first State-owned enterprise allowed to fail.

Mapping company Terralink went into liquidation in 2001, after then-Finance Minister Michael Cullen refused to bail it out.