Published: 1:22PM Friday September 21, 2012 Source: ONE News

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.

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Asset sales profits to go to help Chatham Islands