Home > Dollars & Sense, The Body Politic > That was Then, This is Now #18 (Solid Energy)

That was Then, This is Now #18 (Solid Energy)

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That was then…

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September 2011,

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Solid Energy chief executive, Don Elder and Hon Bill English at Mataura  - 9 sept 2011

Source

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Solid Energy starts work at Mataura Briquette Plant

Friday, 9 September 2011, 2:57 pm
Press Release: Solid Energy NZ

9 September 2011

Solid Energy marks the start of work at its Mataura Briquette Plant

The Hon Bill English, MP for Clutha-Southland and Minister of Finance, today marked the official start of work at Solid Energy’s Mataura Briquette Plant, by “turning the first sod” at a small event on site with neighbours, local authorities, and other guests.

The $25 million Mataura briquette plant is planned to start production by June 2012. It will produce up to 90,000 tonnes a year of low-moisture and higher-energy briquettes from about 150,000 tonnes of lignite mined from Solid Energy’s New Vale Opencast Mine and trucked to the Craig Road site. The plant will use technology developed in the USA by GTL Energy.

Source

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This is now…

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February, 2013…

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No more bonuses at Solid Energy - English

Source

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State miner to return to coalface

Source

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A year and a half  later, neither Dear Leader Key nor Little Leader Bill English seemed terribly keen to be associated with  any more  photo-ops with Don Elder.

In fact, the much vaunted sod-turning in September 2011, to build a brand-new $25 million  briquette plant at Mataura, was no longer quite so glamous. Despite probably still having Southland dirt on his shoes, both Bill English and John Key were at pains to distance themselves from Solid Energy’s highly publicised energy projects,

“Four or five years ago they set out on a big programme of expenditure on alternative energy, including researching into lignite down south to coal gasification and other research-based speculation, and that hasn’t turned out the way they thought.” – Bill English, 22 Feb 2013

“The second thing is that they made a number of investments which have proved not to be very valuable and the Government has been working on that process for the last couple of years.” - John Key, 23 Feb 2013

It’s amazing how politicians seem to have this ability – verging on a preternatural super power – to distance themselves from something  they had only recently embraced and supported with whole-hearted gusto.

Interesting to note that as well as the $23.5 million in bonuses paid  over the past two years to 950 employees,  Solid Energy also paid out considerable dividends to the government;

 

30 June 2009 – $59.9 million (source)

30 June 2010 – $54 million (source)

30 June 2011 – $20 million (source)

30 June 2012 (paid at 30 Sept 2011) – $30 million (source)

Total: $163.9 million

Plus millions more paid in company tax.

With the data above, I have some questions;

  1. It seems remarkable that National only discovered a couple of days ago that Solid Energy’s financial position was not sound. What was Bill English doing last year?
  2. How could Solid Energy’s financial position go from a pre-tax profit of  $127.5 million (see: Solid Energy shines despite earthquakes) in August 2011 – to a massive $389 million debt this year? Did National gouge one of our cash-state-cows?
  3. With Solid Energy’s expansion projects (which Bill English must’ve known about, as he turned a sod of earth in Southland on 9 September 2011), were the dividends paid since 2009 realistic?
  4. With National’s track record of constantly shifting responsibility away from themselves, who are pointing the finger at? With all the highly paid Ministers, board members, and executives – will the office cleaner be held to account?
  5. Is the corporate model, with big salaries and bonuses paid to executives and an evident  lack of transparency, appropriate for state owned enterprises?
  6. Will workers be made to suffer job lossses and subsequent economic hardship, because of the actions of  Solid Energy’s executives and Crown Ministers? Why aren’t the workers offered the same ‘golden parachute’ that ex-CEO Don Elder most likely received?

No doubt neo-liberals will point to the failure of  ‘Solid Energy’ as proof-positive that governments cannot run state-owned businesses.

Not true.

This is proof positive that National (or other right wing) governments cannot run state-owned businesses.

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Acknowledgement

Tim Jones, Coal Action Network Aotearoa

Previous Blog Post

That was Then, This is Now #17

Other Blogs

Robert Guyton: Comments on Solid Energy

The Standard: Nats’ fossil fuel bet & culture of excess bankrupted Solid Energy

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= fs =

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  1. 25 February 2013 at 6:04 pm

    LOL some very poor management by Elder and Solid Energy.

    • Theodore
      26 February 2013 at 1:19 am

      Yeah, $1.1 million worth of bad management.

  1. 28 February 2013 at 12:51 am
  2. 14 June 2013 at 8:03 am
  3. 20 December 2013 at 7:45 am
  4. 27 December 2013 at 8:00 am

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