New Zealand reaffirms state power company sale Q2 next year: PM
New Zealand will go ahead with its first partial sale of a state power company early next year after rejecting the idea of special concessions for indigenous people, the prime minister said on Monday, raising the prospect of a legal fight.
Maori groups have threatened legal action over the decision, which could stall a three to five-year program worth up to NZ$7 billion ($5.6 billion) to sell minority stakes in three power companies, a coal miner, and the national airline, to help to cut debt and return the budget to surplus by 2015.
Prime Minister John Key said his center-right government would proceed with the sale of a minority stake in Mighty River Power between March and June next year, regardless of the threat of legal action.
"That's entirely a matter for them. From the government's perspective, it would not be unexpected," he said in a statement.
The government is aiming to sell a stake in a second power company, either Genesis Energy or Meridian Energy, by the end of next year. The two sales could be worth more than NZ$3 billion.
The government put the planned Mighty River stake sale on hold last month to consult with indigenous Maori tribes on options to recognize their interests in water resources.
Key said the government had rejected a suggestion from an advisory tribunal that Maori should get special rights over the management of water resources and should be given rights ahead of other shareholders in state power companies using water for generation.
It held the view that no one group owns water, and that Maori rights in particular regions could be satisfied through other measures.
In order to sweeten public opinion about the controversial sales, the government has said it will ensure New Zealanders get a preference in share sales, limit the size of individual holdings, and offer bonus shares to locals who hold shares for at least three years.
($1 = 1.23 New Zealand dollars)
(Reporting by Gyles Beckford; Editing by Richard Pullin)