When proxies fail, and university wombles prove they are idiots at business

The Labour/Green proxy blog at The Standard has a post by Anthony Robins where he generously quotes an article by some womble university professor. He says the article proves that the government is short sighted and at the same time proves that he has no idea what he is talking about.

Wayne Cartwright says:

The Government’s plan to sell publicly owned hydro-energy resources is a huge strategic blunder. This is not due to the objections raised so far, such as worries about the public-private ownership model or transgression of Maori water rights. The reason is arguably much more important than both of these concerns.

The Government has grossly underestimated the value of hydro-energy assets to New Zealand citizens. The assets are likely to be worth at least double the amount the Government is prepared to accept. This is because the valuations have apparently ignored the implications of clear signals that global energy costs and prices will increase greatly and permanently within the next 7 to 10 years.

Robins claims that this is proof that the government is doing the wrong thing. But he fails investing in shares 101. 

Far from proving that the asset sales programme is going to be a disaster because it will realise only half of what the assets will allegedly be worth in 7 to 10 years times he forgets that the government is retaining 51%. Now if he says that the assets will be worth at least double then in 7 -10 years the government will have recovered the value, plus got the value out of selling down 49%.

More importantly the people who invest in Mighty River Power and other assets can safely, based on the assessments of a womble professor, look forward to doubling their investment over 7 to 10 years.

All that makes the asset sales programme a win for the taxpayer, in doubling the value of their assets and scoring some investor cash now, and a win for those sensible enough to invest in long term infrastructure assets like power companies.

Robins must blindly believe that once sold someone is going to remove millions of tonnes of concrete and turbines and machinery out of the market and they just disappear. The dams and infrastructure will remain, the government gets some cash, the investors get a return, as does the government and we will also find the dividend stream to the government will be barely impacted.

Quite how this is near-sighted action from the government is beyond me, and quite how it is dooming us isn’t elucidated either by the womble professor nor by Robins at The Standard.

  • JimboBug

    And global energy costs increasing greatly? Only if you completely ignore fracking and assume further huge subsidies going into the permanently “nearly now competitive” renewable scam.

  • In Vino Veritas

    Global energy costs and prices will only rise in the proportions claimed by Cartwright if governments and corporates are stupid enough to develop, or invest in, energy generating technology claimed by the Greens to be of the “sustainable” variety.
    Labour are clutching at straws, nothing more, nothing less.

    • blazer

      surely you know prices and costs re utilities ALWAYS rise.The monetary debt cycle system demands it.Of course every now and then a cardboard cut out in charge of a monopoly like Vector gets caught ramping and has to accept a reduction in price.

      • johnbronkhorst

        Idiot….power / energy costs have been shown to be the most responsive/reactive to supply and demand…until auntie Helen got hold of them…then they were down to how greedily the govt. could increase it’s dividend (pseudo tax) forcing the SOE’s to forgo maintenance and expansion to meet demand…..forcing prices even higher.

        • blazer

          stop making things up…or are you saying the Mighty River float financials have been manipulated to pay the govt dividends at the expense of vital maintenance?Are you trying to sabotage the Natz asset sales programme…einstein!

          • johnbronkhorst

            remember the power cuts in Auckland…due to LACK OF MAINTENANCE!…You are an idiot….the MASSIVE dividend grab was under labour when the govt. owned 100% of the SOE’s and power prices rose by 3% above inflation, year on year, due to the THEN govt. taking out MASSIVE dividend payments (pseudo taxes). Infrastructure was not built at the pace of demand. Labour a re possibly upset because once 49% is sold, they will not be able to corruptly manipulate the SOE’s in this way!!

          • blazer

            an aussie was in charge of Mercury then…what do you expect…!Thats in the past.Are you trying to tell me the Natz have forgone divy payments since they have been in govt?

          • johnbronkhorst

            NO they have taken div. payment….at the rate of inflation…..not 3% above the rate of inflation.

          • blazer

            making things up again john.The divy is a reflection of profits earned,not inflation.

          • johnbronkhorst

            you really are a moron….that is the level of increase in dividend payment reviewed over 9 years of the Clarke govt. compared to the national govt. NOT the methodology used to collect it. Labour collected dividends at a rate that force power prices to rise by 3% above inflation (inflation was around 3%) prices rose 6% yr on yr. Clarke took a larger and large % of profits forcing price up and maintenance & infrastructure expansion DOWN.

          • blazer

            say what you mean then.And as you well know you can regurgitate ‘statistics’ to bolster any premise.Are you saying Labour demanded dividends at those increments?You cannot deny the Natz were inpower when Aucklands biggest power crisis occurred.Also by your rationale Mighty River will be tightly constrained in earnings in the future.

          • johnbronkhorst

            You cannot deny the Natz were inpower ….yes I can….that would be lange in the 80′s

          • blazer

            my mistake…of course you can and will/have…’the 1998 Auckland power crisis was a five-week-long power outage affecting the central city of Auckland, New Zealand.

            At the time, almost all of downtown Auckland was supplied electricity by Mercury Energy via four 110 kV power cable’….read it and weep john.

          • johnbronkhorst

            so it effected more than 700 000 aucklanders…..about 3/4 of the population of Auckland….really. Read article quoted above. Also Lange was in power in the 80′s when we had rolling power cuts across the whole country.

          • Gazzaw

            Correction blazer. Mercury/MRP has nothing to do with connectivity. Lines & line maintenance are controlled by Vector.

          • blazer

            might find that Vector didnt exist at that time Gaz.Mercury Trust did.

          • Gazzaw

            Did I say HAD nothing to do with connectivity blazer?? Vector was established way after the big power cut happened. I’ll say it again for you – Mercury/MRP HAS nothing to do with connectivity. As usual you’re living in the past.

          • blazer

            sorry Gaz…you mentioned Vector in your post…its there for all to see.The question you need to address is did Mercury have anything to do with lines and maintenance pre Vector!Its not a big deal to be wrong sometimes.

          • Hazards001

            WYF does Mercury have to do with transpower you muppet?

          • blazer

            ‘at the time, almost all of downtown Auckland was supplied electricity by Mercury Energy via four 110 kV power cable’the discussion was about power cuts…1998 the worst…comprenez ernie!

          • Hazards001

            Umm no…my reply was in relation to the statements below which were in the order pasted and still are.

            johnbronkhorst
            “National electricity grid operator Transpower was under fire from political, business and civic leaders last night over the huge power cut that brought chaos to Auckland yesterday.
            The cause was a small earth wire which a wind gust snapped off a high-voltage pylon near the Otahuhu B substation, short-circuiting lines supplying electricity for 700,000 or more people throughout central, east and southwest Auckland.”

            Quote from the herald…2006

            Your reply

            blazer
            “an aussie was in charge of Mercury then…what do you expect…!Thats in the past.Are you trying to tell me the Natz have forgone divy payments since they have been in govt?”

            comprenez ernie?

          • blazer

            um…wrong year wrong power crisis.1998 5 week outage.

          • Hazards001

            Read what you wrote halfwit..I was repling to that. If you can’t follow your own thread don’t piss in my pocket!

          • blazer

            you jump in and take things out of context.Why would I piss in your pocket….if you’re trying to back up bronko you are doing a piss poor job.

          • blazer

            further more the massive cuts in 1998 were when the Natz were in power einstein.Also massive cuts in Aucks 09 and 2012…guess who the govt was ?einstein.

          • johnbronkhorst

            Bull shit 2007, 2006

          • johnbronkhorst

            “National electricity grid operator Transpower was under fire from political, business and civic leaders last night over the huge power cut that brought chaos to Auckland yesterday.

            The cause was a small earth wire which a wind gust snapped off a high-voltage pylon near the Otahuhu B substation, short-circuiting lines supplying electricity for 700,000 or more people throughout central, east and southwest Auckland.”
            Quote from the herald…2006

          • jonno1

            You’re partly right JB, except that the cables that failed were past their use-by date (two sets) and needed to be replaced; further maintenance wasn’t an option. The problem was lack of timely investment – the Vector tunnel was the outcome but not finished in time to avoid the CBD outage in 1998.

            @Blazer: The investment decisions lay at a higher level than the CEO, who was as much a victim as any customer, and unfortunately died in office. Also, Vector doesn’t pay dividends to the government but to its shareholders which may include you if you’re in the former AEPB area or have bought shares independently.

          • johnbronkhorst

            Preventative maintenance (including replacement parts) would have prevented the catastrophic failure of the components…..By the way you are now headed into MY area of expertise…preventative maintenance!!

          • jonno1

            Happy to defer to your expertise in preventive maintenance JB, however in the case of the 1950s gas cables the gas-feed interstices (love that word) were so full of oil that had seeped from the insulating papers that they could not be cleared. This was indirectly due to gas leaks at the joints allowing pressure to drop. Preventive maintenance was carried out to mitigate this, but it just wasn’t possible to keep up due to aged cables. You may have seen nitrogen bottle-banks above ground at some of those locations (eg Upland Rd).

            It was a different issue with the oil-filled cables; these were prone to hot spots causing conductor expansion into joints and consequent dog-legging of the conductors inside the joint. Of course a bent wire doesn’t straighten out as easily as it bends, and eventually the bent bits shorted out. Again, with the benefit of hindsight the joints could have been replaced sooner – preventive maintenance! – but hindsight is a wonderful thing. The summer of 1998 was particularly hot (like this one) which exacerbated the problem.

            So apart from the delay in approving investment in the tunnel and new cables, it was largely an unfortunate combination of events, the culminating factor being the extreme weather leading to exceptional CBD aircon loading.

            But I would agree that the subsequent Transpower events could be sheeted home to inadequate maintenance. The earthwire case was simply a failed (rusted) shackle as I recall which should have been picked up on either condition-based or time-based maintenance.

          • johnbronkhorst

            One theory for looking for kinks and excessive bends in any cable. Is to send an ultra high frequency radio signal down the cable and look for reflections This is done on communications cable and fibre optic cable (using ir signal). The time the signal takes to reflect is measured and tells you where the fault is. Experienced users, can tell you by the size of the reflection, how big the “kink” is or whether you have a partial break!

          • jonno1

            Thanks JB, I think I’ve read about this technique, but haven’t used it. Would it distinguish between a kink and a soldered ferrule (which may be only centimetres apart)? Maybe if you saw multiple reflections where only one was expected that would provide a clue.

          • johnbronkhorst

            The hardest thing to tell the difference between, is a joint in the cable and an actual near break. But this can be overcome by looking at the installation records and eliminating all large reflections that appear at the known joints. Otherwise the amplitude of the reflection will tell you the severity of the potential fault. Once you have cleared up and identified these anomalies. You must then go and check each joint physically. To be absolutely sure.

          • johnbronkhorst

            By the way…the limitation of this method is….the higher the frequency the shorter the distance that you can test (as the attenuation of the signal will cause a fading into background noise). So you need points not too far apart to test from and to.

          • johnbronkhorst

            In fibre (using IR) 10Km was used cable….roughly the same. Depending on the size of the cable (at communication cable level, also the number of pairs in the cable).

          • jonno1

            OK, I think you’re also implying that a benchmark survey upon installation is a useful starting point, this would also help calibrate the machine to known joint positions. Then check for anomalies on subsequent tests or when there is an incident.

          • johnbronkhorst

            Yes the rusty shackle should have been picked up!! But it wasn’t. Due to a drop off in inspections. Due to a lack of money, the very money the govt. of the day took out of the business (in pseudo taxes).

          • jonno1

            Far be it for me to defend the gummint (of any hue) but I think in this case the maintenance contractor had to take some responsibilty (I’m happy to stand corrected if he had been instructed to cut back on inspections).

      • In Vino Veritas

        Bradfords reform of the power industry in NZ, saw power prices fall (how do you reconcile that blazer?). Clarks & Labours reregulation of the industry saw prices rise steeply. SOE power co’s provided record dividends to Labour (thanks to the 20%+ increase in prices). Under National, prices have leveled off, generally going up in line with inflation.
        So, with this information, it could be concluded that prices rise when a Labour Government is in power and fall or stay static when a National Government are in power. Nothing to do with the monetary cycle.

        • blazer

          if this info was accurate maybe…but as it is not ,it is useless information.The Natz were in poweR when Auckland experienced its biggest ever power crisis,which our learned correspondent john sheets home to lack of maintenance.

          • In Vino Veritas

            Whats not accurate about it blazer? Go to http://www.energynews.co.nz/news-story/10542/readers-vote-bradford-countrys-best-energy-minister-new-poll

            and pay, and you’ll get the facts and figures. Oh, they’re from the MED
            and Dept of Statistics, so have a dig about and you’ll be able to find them. Or if you are too lazy, go to kiwiblog – there is a graph that has been posted there a few days ago.

          • jonno1

            I don’t recall exactly when Mercury/Vector was privatised (maybe 1993?), but the point is that it was never a government-owned entity. Prior to privatisation it was a creature of statute with its own Act and effectively had no ownership (or you could say it was owned by its consumers, hence establishment of the AECT). So while it was regulated by government (and still is), it’s irrelevant who the government was when the CBD crisis occurred (it happened to be National). Transpower and its predecessors OTOH has always been either a government department or an SOE, but I still wouldn’t be too hard on whichever government was in power at the time (it happened to be Labour) as the responsibility for operational matters rests with the board.

          • blazer

            agree.But some think politics prevails…the biggest fish john caught was when the Natz were in power….and Vino went to hospital once…when Labour was in govt!

  • Patrick

    Transgression of Maori water rights?? I thought the courts had ruled otherwise? Perhaps a pointer to Labours’ intentions on this matter.

    If hydro power schemes are going to be the goldmine the educated Professor claims they are then we should start building more, say a new scheme every 10 years drip fed into the system. What a way to make a few bucks for the taxpayer.

  • johnbronkhorst

    At the speed of innovation. Taking into account the truism…”necessity is the mother of invention”. Before the “energy crisis” implied above becomes critical. A replacement for current technology WILL be found.
    eg before the piles of house shit (not political uttering, as above)…yes actual horse shit became too big a problem….the horseless carriage was invented. Same true for crop production and hunger in the western world. The light bulb improved productivity. Computers, automation etc etc

  • cows4me

    Well giving this latest piece of pontificating dribble on behalf of the fruitloops and assorted tossers I would expect the next announcement of a new dam to be welcome with shouts of hallelujah and praise be. Somehow I suspect I shall be disappointed.

  • johnbronkhorst

    sorry to break the relevancy protocols on here. But I just read this.

    “Eight men charged with forgery after a vote-stacking investigation into the 2010 Auckland Council local board elections could face further delays to their trial.

    The men, including unsuccessful 2010 Otara-Papatoetoe local board candidate Daljit Singh, face multiple charges of using a forged document.

    The police investigation was launched after more than 300 people were removed from the electoral roll leading up to the election due to irregularities.

    It was reported 48 people were living at one address.

    The men, all from the Punjabi community, were due to have their trial at District Court level last year but it was subsequently shifted to the High Court due to public interest.”

    Shouldn’t it also point out that they are members of the Labour party…or have I got that wrong?….please correct me if I have!!!
    Source…Yahooxtra

    • Hazards001

      Said it before…say it again, our immigration laws are crap. NZ lets anyone in that the rest of the world doesn’t want. How the f..k did we end up with a “Punjabi community”?
      As far as I know we don’t have a Scottish or Irish community…or an English one..I suspect it would be deemed racist and discriminatory to have one (Societies don’t count we’re talking community)…could be wrong though?

      As a 7th generation Scot/Irishman I tend to think of myself as belonging to the Kiwi community..maybe I’m old fashioned?

  • Mr_Blobby

    Stating the obvious there Whale. Those that can do, those that can’t teach, those that can’t teach become green muppets.

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