The visible hand in economics

(Re)nationalise the grid? Protecting our “Strategic” Assets

Posted on: April 21, 2008

You probably all remember the shady tax deal that Transpower did a while ago whereby they sold the South Island Grid to a US bank who kindly leased it back to Transpower for 100 years.

Well it appears that the credit crunch is hitting Wachovia (said US bank) pretty hard which has called into question the future ownership of the grid. Some people fear that the grid could be used to settle Wachovia’s debts.

Now I don’t know about you, but I’m pretty worried about some greedy creditors overseas either

A) Pulling up the power lines and selling them

B) Being even greedier then our current owners (a greedy bank present)

How do we solve this dilemma and protect our “strategic” asset? Well if you believed that A) or B) were a problem you would nationalize the grid! That will certainly help us attract investment into the country.

At the end of the day, it doesn’t really matter who owns it, Transpower will continue to run it. The assets have little use outside New Zealand (a sunk asset in economic terminology) and thus any other owner would have little option but to also lease the asset to Transpower.

It would be funny if the government nationalized it though!



1 Response to "(Re)nationalise the grid? Protecting our “Strategic” Assets"

With that kind of “funny”, little wonder that kids have the crap scared out of them by clowns.

It is election year, Agnitio, which means the only use of structured thought will be done by those who have to cost policy options. The actual policies themselves need not have any grounding in reality.

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