Councils get €2bn from public utilities

The dividends paid out to local councils and provincial governments by energy, water and waste disposal firms have gone up four-fold, from €500m in 2004 to €2bn last year, reports Monday’s Financieele Dagblad.

Public utility companies in the Netherlands are largely owned by the public sector.
According to the paper, the alternative to dividends would be lower prices for consumers. It points out that energy concern Nuon’s profit payout to government shareholders in 2007 could have been used to lower tariffs by an average 7%.
In the same way, consumer prices at water company Evides and waste processing firm Twence could have gone down by 15% and 18% respectively, the FD says.
The paper says that Rotterdam is ‘the champion’ when it comes to receiving dividends. Last year the city council received almost €200m, half of it from the port authority. And in 2006 the figure was over €500m thanks to a super-dividend from its waste disposal processing firm AVR.
Extra pay-outs are also a popular way to flatter local government shareholders, says the FD. This is possible because the utilities have much higher capital assets than they need, according to the paper.

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