Cabinet holds back on pushing asset sales, waits for Supreme Court

The government will wait for the Supreme Court to rule on the Maori Council appeal against the partial privatisation of state-owned electricity company MightyRiverPower, even though it needed a decision by today to meet its own sales timetable.

Prime Minister John Key told his post-Cabinet press conference that the Cabinet could have passed an Order in Council today to proceed with the sale, but it would have been “churlish” to do so with the court promising to produce a decision by the end of the month.

The fact the five judge bench of the country’s highest court has been unable to reach a verdict is fuelling speculation the court is split on the question of whether the decision to partially sell state assets should be judicially reviewed.

The New Zealand Maori Council sought a judicial review in the High Court late last year, which was swiftly rejected. An appeal then went straight to the Supreme Court, overleaping the Court of Appeal in deference to the government’s desire to get a sale under its belt by mid-year.

The MRP sale, if successful, would be followed by the sale of up to 49 percent of Meridian Energy or Genesis Energy by the end of 2013.

The government had sought a decision from the Supreme Court by Feb. 18 in order to meet a timetable that would see the company floated on the NZX just ahead of the May 16 Budget.

However, the court said last week it would not be able to rule that quickly, although it would produce a decision by the end of the month.

Asked whether the delay represented an impediment to the sale, Key replied: ” It’s not really. In a perfect world, we would have had an answer today because that fitted our timetable best but I think that a couple of weeks pushes up to the edge and it doesn’t make the first date we wanted on the timetable possible.

“Frankly, we could have tried to push the process and passed an Order in Council today but given the Supreme Court is working as fast as it can anyway on a relatively tight deadline, it would have been a bit churlish of us to push that.”

Key also confirmed he had seen further reports on state-owned coal miner Solid Energy in the last fortnight, following the resignation of its long-time chief executive Don Elder, and that it was not fit for partial sale “any time soon.”

(BusinessDesk)