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The billionaire and the rubbish tip

by Lindsay Shelton
Were you surprised to learn that the smelly rubbish tip in Porirua is run by a company that’s owned by one of the wealthiest men in the world?

Details of the smells were revealed in a report leaked this week to Radio New Zealand. The report says the exceptionally high concentration of hydrogen sulphide in gas at the landfill is unusual and dangerous.

The smelly landfill is run by EnviroWaste, a company owned by Hong Kong billionaire Sir Li Ka-Shing. It doesn’t own the tip. But it is the operator, on behalf of the Porirua City Council. And the council has served an abatement notice on the company because of the “offensive and objectionable smells.” The issue is to be decided by the Environment Court.

It’s confusing to realise that a billionaire can make money from rubbish, when our local councils have been getting out of the business because they claimed it was costing them too much.

The Wellington City Council handed over its rubbish collections to EnviroWaste in 2012, with the statement that they would “cost less.” One of the reasons was that EnviroWaste agreed to do the job with one man per truck, when the council had always employed two. There were redundancies.

Yet only six weeks before that decision was announced, Paul Eagle had given a warning to the council:

“With the waste sector being worth $400m to local government nationally, the community is telling us they want direct council control of waste collection, transport and disposal – not an arms-length delivery mechanism.”

How did a Hong Kong billionaire get to own a company that runs a rubbish tip in Porirua, and collects rubbish in Wellington? It happened because a New Zealand-owned business was sold to overseas owners, more than once.

EnviroWaste was established in 1995 by a merger of a Fulton Hogan South Island company and an Auckland company started by the Auckland Regional Council. In 2001 the Aucklanders sold their half of the company to Fulton Hogan. In 2007 Fulton Hogan sold the entire company to an American investment company named Ironbridge Capital. In 2013, Ironbridge Capital sold it to the billionaire, who then inherited responsibility for running the smelly tip as well as collecting rubbish in the capital city.

There’s more. The billionaire is the 100% owner of Wellington Electricity, the network that delivers our power.

How did this happen? The story is much the same. It started in 1992 when the Wellington City Council decided to sell its electricity department. Canadian-owned TransAlta first acquired 49 per cent (when Fran Wilde was mayor) and bought the remaining 51 per cent (during the Blumsky mayoralty.) In 1998, the Canadians onsold the company to a banking group in the United States. The Americans sold it to Vector in 2003. In 2008, the network was sold to its present Hong Kong owner.

Forbes Magazine tells us that Sir Li Ka-Shing is worth $US24billion. He’s the richest man in Hong Kong, and the seventeenth-richest man in the world. An indication, no doubt, that our councils should have taken better advice before getting rid of the businesses of handling rubbish and distributing electricity.

4 comments:

  1. Phil C, 2. October 2015, 3:47

    A salutary reminder of why a small, isolated and vulnerable country should not hand over essential assets to be run by distant foreign interests.

    I well remember Ms Wilde’s specious assertion that the local power co was only returning a few millions dollars a year. The next chump in power, Blumsky, was one of those dreadful “privatise it all” nut jobs that NZ produces so many of. Wellingtonians are now paying the price.

    I can’t figure out if mind-set behind the free market mania in NZ was one of servile stupidity, gross naivete or villainy. Perhaps all three.

     
  2. syrahnose, 2. October 2015, 5:02

    Oh no, its not the dreaded ‘Yellow Peril’ again, and a Chinese billionaire! This is flat out pandering to Kiwi racism. What difference does it make who operates it if it isn’t the city council OR how much money they make or where they live. They bought and took the risk hoping it might make their investment back. Was it better when it was whiter than white Canadians and then Yanks who owned it.

     
  3. greywarbler, 2. October 2015, 15:20

    Oh no it’s a Chinese puzzle! I’m angry that the dreaded overseas or local private investment economic model difference is being confused again. This is flat out pandering to Kiwi fascism.

    Who operates the rubbish and the electricity matters. When privately owned, the price must rise to cover shareholders’ return and the constant costs stacked up by constant selling to new entities while the old ones take out whatever the market will stand when they sell. It is very inefficient, with costs added but only covered by price rises, reductions in staff or service, and delayed maintenance and investment.

    An investor 17th in world wealth now owns it, but it is a ball being tossed from one wealthy entity to another. In 2001 Envirowaste-Fulton Hogan, 2007 Fulton-Hogan to USA Ironbridge, 2013 Ironbridge-PC name. So 2019 to whom?

    And each time sold for an increased price much above inflation? Wouldn’t it be better to hold our own services to be run at cost plus inflation plus say 3% p.a. and that would provide for upkeep and needed future investment.

     
  4. Phil C, 6. October 2015, 3:04

    Syrahnose. It doesn’t matter what colour your capitalist is. Wonderful system-doesn’t care about people at all.