Profits from the Government's controversial asset sales programme will be used to help the residents of the Chatham Islands, the Prime Minister has announced.
The small community of just over 600 people needs millions of dollars of investment to upgrade its decaying port and boost power generation.
On his first visit to the islands, John Key conceded the Government is likely to fund a $20 million upgrade to the vital but rotting wharf, and may put about $6 million from the partial sale of state assets into more power generation.
The move would bring down electricity bills which are currently three times higher than those on the mainland.
However, the Government's contribution cold be reduced if proposals to dredge phosphate from the sea floor are realised.
Chatham Islands Mayor Albert Preece is in discussions with Dutch and New Zealand joint venture partners interested in mining the mineral which is used in fertiliser.
He told ONE News he has heard figures of $1.3 billion talked about in relation to the venture.
Key said the Government would be in discussions with the group if the plans go further ahead. "That's standard practice in New Zealand when we look at some developments," he said.
The prospect of a large scale investment in the islands is being welcomed by locals.
"When this happens it'll stabilise the population and increase the population of the Chathams and we need the population for the island to survive," craypot maker John Day said.
Fisherman Lian King agreed - providing they "don't get stuck with by-product on the island".
"But for sure any development or industry within the Chathams and growth would be huge for us," he said.
Investment in housing
The Government will invest a further $400,000 in new state housing on the Chatham Islands, the Prime Minister announced today.
"There are a number of low-income households in the Chatham Islands, but there is no state housing and only a limited supply of social rental housing. A definite need for affordable rental housing exists," said Key.
Previously, Ngati Mutunga O Wharekauri Asset Holding's had received a Government grant, and with commercial loans had recently built five new homes for low-income families.
"The new $400,000 in grant money I am announcing today is to help achieve the aim of housing more of those in the Chathams who are in need," said Key.