ECT and council find themselves at a crossroads

EDITORIAL

Eastland Community Trust has been pressured for some time to consider direct assistance for the region’s power users, who are its beneficiaries - along with all people who live or do business in the Gisborne district. This has been resisted, in preference to continuing to use the dividends from ENL operator Eastland Group and ECT’s other investments to support wider community initiatives.

This approach goes back to 1993 when the trust was formed with the assets of the former Poverty Bay Electric Power Board, and $20m of capital, although ECT has only turned on the tap of grant funding over the past nine years — rising to more than $4m a year recently — as well as making some active investments to support regional economic development, which is a driver for the trust from its deed.

Another driver is to preserve its capital, and the trustees have taken advice and determined this is now 10 times greater than the original amount. Trustees over the years have significantly exceeded this deed requirement, as the trust now has equity of $308m.

It would be difficult to overstate the importance of this regional wealth fund to our future prospects.

Some are now asking whether such a large resource is needed on the sidelines, when there are so many pressing needs in our community, the council (its capital beneficiary) faces big financial challenges, and there is so much potential here that could be unlocked by wise investments in economic growth opportunities and community infrastructure.

It is equally fair to ask, as our columnist does today, why Eastland Group does not now step back from its profit focus at the power network it originated from, funded by the electricity users that are ECT’s beneficiaries. Embarrassingly for the group’s community owner, this profit focus has attracted previous ire from the Commerce Commission in relation to both ENL and the port.

Others are horrified at the thought of both, and the risk this wealth fund is frittered away.

Ultimately ECT trustees will decide, but the chairman has indicated they are open to a lead from the council on these issues.

Eastland Community Trust has been pressured for some time to consider direct assistance for the region’s power users, who are its beneficiaries - along with all people who live or do business in the Gisborne district. This has been resisted, in preference to continuing to use the dividends from ENL operator Eastland Group and ECT’s other investments to support wider community initiatives.

This approach goes back to 1993 when the trust was formed with the assets of the former Poverty Bay Electric Power Board, and $20m of capital, although ECT has only turned on the tap of grant funding over the past nine years — rising to more than $4m a year recently — as well as making some active investments to support regional economic development, which is a driver for the trust from its deed.

Another driver is to preserve its capital, and the trustees have taken advice and determined this is now 10 times greater than the original amount. Trustees over the years have significantly exceeded this deed requirement, as the trust now has equity of $308m.

It would be difficult to overstate the importance of this regional wealth fund to our future prospects.

Some are now asking whether such a large resource is needed on the sidelines, when there are so many pressing needs in our community, the council (its capital beneficiary) faces big financial challenges, and there is so much potential here that could be unlocked by wise investments in economic growth opportunities and community infrastructure.

It is equally fair to ask, as our columnist does today, why Eastland Group does not now step back from its profit focus at the power network it originated from, funded by the electricity users that are ECT’s beneficiaries. Embarrassingly for the group’s community owner, this profit focus has attracted previous ire from the Commerce Commission in relation to both ENL and the port.

Others are horrified at the thought of both, and the risk this wealth fund is frittered away.

Ultimately ECT trustees will decide, but the chairman has indicated they are open to a lead from the council on these issues.

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