14 Mar 2013

Solid Energy's former boss says sorry at hearing

9:21 pm on 14 March 2013

Former Solid Energy chief executive Don Elder has apologised to anyone affected by the financial downturn at the state-owned coal company.

Don Elder and John Palmer appearing before Parliament's commerce select committee.

Don Elder and John Palmer appearing before Parliament's commerce select committee. Photo: RNZ

Dr Elder and former Solid Energy chairman John Palmer have appeared before Parliament's commerce select committee.

Solid Energy is in talks with its bankers and the Government about a possible bailout as it faces a $389 million debt.

Dr Elder has told the committee he accepts in hindsight that some decisions made in the past were wrong.

However, he said the company was hit by what he described as a "perfect storm" last year, with a sudden and significant drop in the price of coal coupled with a high Australian and New Zealand dollar.

"The coal industry around the world received a stunning blow from an unprecedented collapse in international coal prices.

"Coking coal prices our primary export, fell very fast, far, far, below the range anyone was forecasting anywhere in the world."

Dr Elder apologised to those who have lost their jobs with the company and others who have borne the brunt of Solid Energy's financial problems.

Hundreds of jobs have been lost both on the West Coast and at the company's Christchurch headquarters.

Dr Elder and Mr Palmer were asked what influence the Government had on Solid Energy's financial decisions.

Mr Palmer told MPs it was up to the company's board to make any decisions on debt levels and dividends, and it accepts full responsibility for what has happened.

He says the board took risks that didn't pay off but he doesn't have any regrets about the path and strategy the board set.

After the hearing, Mr Palmer told reporters he's appalled by the way Dr Elder has been treated.

"Both by his demeanour and by his actions inside Solid Energy, in the time that I have been there, he has been both a role model and an inspiration for very many people in the Canterbury community and in Solid energy.

"He deserves applause for the sort of vision that he has brought to the company and he does not deserve the derision that he's had from many of the media and the public at large."

Dr Elder has come in for some criticism, including for still being on his $1.3 million a year salary for two months, so he can provide information to the company if needed.

Minister stands firm

State-Owned Enterprises Minister Tony Ryall however is standing firm on his view that Solid Energy's troubles have nothing to do with the Government.

MPs were told that a change in policy on renewable fuels affected the profitability of the company's biodiesel operations.

But Mr Ryall says the board should have managed that as it was a Government commitment, while in opposition, to change the policy.

But Labour MP Clayton Cosgrove, who is deputy chair of the Commerce Select Committee, doesn't accept that. He says the minister and the prime minister are contradicting each other.