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[sharechat] Re: Electricity, WHS (was exec performance)

From: "Hans Van der Voorn" <>
Date: Wed, 21 May 2003 10:44:38 +1200

Hi Snoopy

> I think the point Cushing was making was that the Electricity industry
> needed an overall plan.   There would have been other ways to achieve
> that apart from retaining Electricorp as a single unit of course.  But I
> hardly think you could say that the deregulated electricity market that we
> ended up with got it right.   How could you have less government
> involvement than we had under the SOE model?

I think what we ended up with was a bit of deregulation coupled with
predominantly government ownership (3 of the 4 main generators plus
Transpower which owns the transmission lines and operates the whole system).
The electricity market appears to me to be overly complex and I suspect
partly designed to make it harder for new entrants. Remember it was designed
when Electricorp was still more or less running the show, albeit then
separated from Transpower. While there are certainly things wrong with the
way the market operates, the concept of a deregulated market is by no means
fatally flawed.

We now have a political solution put forward by the Government, an energy
tax. I confess that I fear and loath both additional taxes and central
government planning. Could I refer you to a release by Hodgson in December
last year which
followed a number of parties pointing out a looming energy shortage.
Effectively it says "our modelling is better than yours and we don't think
there's a problem". Politics always takes precedence.

The real issue we have to face is the end of cheap energy. The market was
sending the right price signals, and has been sending them for a long time.
A number of big industrial users chose not to hedge their electricity
requirements because they thought the hedge prices were too high, bad
management by them I say. You might recall I flagged the issue in this forum
on 6 Dec last year (see the quality of information you get through

> Am interested in this comment.   I'm not sure of the history of Muir, but
> are you saying that because you don't favour Muir *or* because anyone
> appointed after Stephen Tindall would find those boots very difficult to
> fill?

I think both. Tindall was a genuine entrepreneur, Muir seems more like your
typical corporate kind of guy, talks the talk but....

WHS days as a growth stock must be over. I can't believe building big stores
in small towns all over NZ makes any sense.



----- Original Message ----- 
From: <>
To: <>
Sent: Tuesday, May 20, 2003 11:19 PM
Subject: Re: [sharechat] Executive Performance (was wri pgg wkl )

> Hi Hans,
> >
> >
> > As point of clarification Selwyn Cushing was never a chief executive
> > at Electricorp,
> >
> >
> You are correct Hans.  Sir Selwyn was in fact Chairman of the
> Electricorp board at the time.
> >
> >
> >In terms of Cushings comments at the time, I'm sure they weren't
> > particularly prescient but reflecting the views of a then monopoly
> > organization about to lose its dominant position. And I don't think
> > he's been proved right on the electricity market either. I would
> > suggest it's a case of too much government owned involvement not too
> > little.From that point he may be seen in hindsight to have more misses
> > than hits overall.
> >
> >
> >
> >
> > In terms of Ron Brierley, I think it's more a question of horses for
> > courses. Just because he is good at spotting value opportunities and
> > manoeuvring his way through them doesn't make him qualified to chair
> > a bank, which he patently wasn't.
> >
> >
> I'm not sure if Sir Ron wasn't used as a bit of a fall guy in the late
> eighties BNZ debacle.   It was some of those high flying deals that sunk
> the BNZ and Sir Ron should have known the kind of risks involved.
> After all, his own company was doing just such deals!
> >
> >
> > Another interesting case of management is Greg Muir of WHS. My
> > prediction would be that WHS performance under his leadership will be
> > significantly less than under Stephen Tindall. Admittedly an easy call
> > to make based on the current shareprice.
> >
> >
> >
> --
> Message sent by Snoopy
> on Pegasus Mail version 4.02
> ----------------------------------
> "Dogs have big tongues, so you can bet they don't
> bite them by accident"
> --------------------------------------------------------------------------
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