Dear Editor,

The fiasco concerning Shoreline and its operation is a dilemma created by the government themselves. From your article of the same (8 April), it is clear that both the government and Shoreline operatives have collided with their various public statements, and in turn raises many questions. Shoreline is now returning the favor, giving the government the first option to buy back the electricity business. Shoreline's chairman stated that to secure the arrangement with government, reliability, efficiency and sustainability needs to be secured. This implies that by selling back to the government, this will be achieved.

From an economic point, whatever agreement is reached between government and Shoreline, the result will become a gentleman's handshake - a commercial exercise if you like. However, this will not achieve the public benefit required because with government entering into this particular arrangement, the utility's true market price and value will not be known because it is not being tested on the open market.

Another word, the government is prematurely putting its hand up for the purchase. Secondly, there is nothing wrong in securing a foreign company to manage the power station provided the necessary safety nets are in place, both in policy and political framework. It is also unfortunate that the govt can't do that now until the utility is securely back in their possession. When that happens, then they should offer a new contract to the right operator that meets stringent requirements, then setup a public authority to monitor and scrutinize these operations and to enforce a pricing mechanism that fits consumer expectations. By Shoreline offering a significant price tag to government for the buy back today, we will never know the utility's true and real market price.

This is really a missed opportunity for the public because the government have made two vital mistakes over the years, first by selling this utility to Shoreline without putting in place the necessary legislative framework to keep consumer prices down. Now, the government is making another big mistake by considering a price tag that will be acceptable to buy back the utility. The initial mistake is that the utility should have been tendered to the open market (for a high price) in 1998, rather than being negotiated politically with the current owners.

Shoreline and the government cannot claim that efficiency in costs and sustainability has been achieved particularly when consumer's are being slugged with a monthly bill that they simply cannot afford. Should government wins back the utility, they should seriously consider offering it to the highest bidder on the open market. But do so by supporting it with a legislative framework that defines how the utility is to be operated, keeping in mind the right for consumers to enjoy a rational monthly bill. As much as we want these types of utility to remain in the public, economics also tell us that this is not always the desirable option. This particular scheme have failed because the individuals involved in the sellout did so with a financial motive with no regards to the interest of the public. What we have is a system of government overtaken by greed, with individual ministers often developing ideas to fit some other particular 'hidden' agendas right under our noses.

Jason Faletau

jfaletau [at] hotmail [dot] com