Predatory share sharks circle our power assets
Former Wellington accountant David Scott is enticing Hawke’s Bay power consumers to privatise Unison, our regional lines company.
He has waved around an extraordinarily fanciful $10,000 payout to Hawke’s Bay households, with an enthusiastic but facts-free sales pitch.
Mr Scott’s latest $10,000 bid follows one of $4000 he made only a few weeks ago, at the recent power trust annual public meeting. It would appear that his earlier figure was not incentive enough, so just throw in another more attractive number to get people’s attention.
As a former Wellington City resident, one would think Mr Scott would learn from the sad lessons power consumers have had with their privatised lines company, Wellington Electricity.
Sold off in the 1990s, a stream of international owners have stripped and squabbled over the remains ever since. It is now in the ownership of Hong Kong investors Cheung Kong Infrastructure.
Back then, Wellington power consumers were seduced with a payout of a few thousand dollars. Enough to buy a new fridge, put a deposit on a car or go off for a holiday.
These small blessings are now long forgotten and a lifetime of regret is all that is left behind. In its entirely profit-driven overseas ownership, the inevitable price gouging has attracted Commerce Commission attention. Power consumers have lost out on their share of capital growth.
On his crusade, Mr Scott has made assertions about Unison’s financial performance that are fundamentally wrong.
He claims that over 22 years, the company’s return on investment is 1.7 per cent. This is incorrect. He makes a simplistic calculation using net cash returns over the period, ignoring gross returns and capital gains. He retrospectively applies current asset value to come up with his non-sensical figure.
Figures provided by Unison show the full return provided over the 22 year period, including the increase in shareholder (book) value, is 14.2 per cent. This is made up of an average gross dividend yield of around 5.7 per cent p.a. and a further 8.5 per cent year-on-year capital growth.
By anyone’s analysis Hawke’s Bay power consumers are getting a healthy return.
My money is on a much more discerning Hawke’s Bay public seeing through the ruse. It is my experience that there is very strong public sentiment in our Hawke’s Bay community to ensure all the financial and social benefits of utility ownership are retained by our community.
The history, over multiple ownership reviews, is that Hawke’s Bay power consumers universally want to retain public ownership of their power lines assets. As trustees, we are committed to this outcome unless told otherwise by the consumers we represent.