The Government postponed an announcement this week on the
sale of shares in Meridian Energy, sparking doubts about
whether the sell-off will go ahead on schedule in November.
Opposition MPs believe the sale has been stalled by
embarrassing revelations about the public bailout of Tiwai Pt
aluminium smelter, Meridian's biggest electricity customer.
It is understood the Treasury had been due to announce
details of a share "pre-offer"on Thursday or Friday, but
abruptly pulled the announcement after news broke of its
concerns about the $30m bailout.
On the streets of Auckland yesterday, views were mixed on the
impact of the delay.
Simon Dromgool, an engineer from Tauranga, said it would not
deter him from buying shares. "I see it as positive long-term
Julie Huckson, a student accountant from Hawkes Bay, said she
had analysed Meridian's figures as part of an accounting
project and didn't think it looked like an attractive offer.
Yesterday, State Owned Enterprises Minister Tony Ryall
declined to comment on any postponement of the announcement,
stating only that such procedural matters were "flexible".
"We'll be making a follow-up announcement about the Meridian
share offer timetable shortly."
On Thursday, in the face of intense scrutiny from Labour and
the Greens, a document "dump"revealed the Treasury advised
against making a payment to Tiwai Pt because it would "result
in a significant transfer of value from New Zealanders to
Pacific Aluminium and Rio Tinto shareholders."
Last month, after threatening to close the smelters, the
owners agreed to a new electricity deal with Meridian -
propped up by the Government's $30m sweetener.
Labour spokesman Clayton Cosgrove said: "I would have
expected some sort of pre-offer any time now because the
window is closing and they have to act pretty quickly."
Greens MP Gareth Hughes said problems with the Mighty River
Power sale had been a bad look, and the Government would be
closely "weighing up the options"for Meridian. "They had
400,000 pre-registering for Mighty River Power ... then
getting only 117,000 buyers. Now we've seen the Government
bent over a barrel by Rio Tinto. It's not been going
smoothly, has it?"
Hughes said the Government should suspend all sales pending
next year's referendum - forced by a petition signed by
327,774 New Zealanders - on selling shares in the state power
firms and Air NZ.
Cosgrove said the Government remained hellbent on the
Meridian float, despite the firm's declining value and
opinion polls showing 87 per cent of Kiwis opposed asset
"If [Prime Minister] John Key was still at Merrill-Lynch,
he'd be advising against this," Cosgrove said.
"No one in their right minds would be selling revenue-earning
assets"to build non-revenue assets such as hospitals and
- by Edward Rooney of the Herald on Sunday, additional
reporting Elesha Edmonds