Mighty River Power sale: Q & A

Prime Minister John Key. Photo / Michael Craig

Prime Minister John Key is this afternoon expected to announce whether his Government will press on with the partial sale of Mighty River Power this year or wait until next year.

Why today?
Mr Key's announcement is essentially a response to the Waitangi Tribunal's interim report two weeks ago on the National Freshwater and Geothermal Resources Claim brought by the Maori Council.

What did the tribunal say?
That the sale should be delayed because it could affect the Crown's ability to recognise and compensate Maori for any proprietary or ownership rights they may have over freshwater. It said the delay would allow a framework for recognising and compensating for those rights to be developed through negotiations between the Crown, iwi the Maori council and others.

What has the Government said about that finding?
Throughout the entire debate including the tribunal hearings, Mr Key and his Government have said the sale will not affect the Crown's ability to address Maori rights over water.

Why doesn't the Government want to delay?
The Government's "Mixed Ownership Model" or partial asset sales programme is a key part of the Government's plan to control debt. The $5 billion to $7 billion cash it would free up would be money the Government doesn't have to borrow. A significant delay to the programme would affect those plans and could prompt reassessment by ratings agencies.

Also, opportunities to the sell the companies are effectively limited to two a year or just one in an election year. If Mighty River was delayed until next year, the Government would have just three windows of opportunity left before the 2014 election.

Mr Key said he could just ignore the decision didn't he?
Yes but that would almost inevitably trigger a bid a High Court injunction to stop the sale by the Maori Council or even South Waikato hapu Pouakani. Even if the attempt to gain injunction failed it would eat up valuable time. Investment bankers working on the sale already say it will be tough to complete it in the time remaining this year.

What about the Maori Party?
Mr Key's comments about ignoring the tribunal placed some strain on National's relationship with the Maori Party. A decision to disregard the tribunal and push ahead with the Mighty River sale will test the relationship further put pressure on the Maori Party to walk away from the Government.