Treasury balks at three SOE sales in 2013

The Treasury doesn't think it would be a good idea to partially sell sell all three state-owned power companies in the same year.

The Mighty River Power share float is due in the first half of next year and Finance Minister Bill English has floated the possibility of Genesis Energy and Meridian Energy also going on the block in 2013.

Treasury papers released on Friday shows it advised the government against doing that.

"Market capacity dictates that it is only practical to complete one sale of the size of these three companies per half year," it said.

Mr English said on Wednesday two of the power companies would "certainly" be sold next year.

"The question is whether we do three. Some people have suggested it," he said.

Labour's state-owned enterprises spokesman, Clayton Cosgrove, criticised Mr English at the time and warned the market would be flooded.

"There simply isn't the demand for three energy companies in the share market - low demand means low share prices which means the companies are sold off for a pittance," he said.

On Friday Mr Cosgrove said Mr English seemed to be ignoring the advice of his Treasury officials.

"National is now so desperate to sell its SOEs after the debacle of 2012 that it wants to foist all three onto the market next year," he said.

Asset sales are unpopular and Labour is suspicious about the government wanting to get rid of the companies before 2014 - an election year.

The High Court earlier this month dismissed a bid by the Maori Council to delay the Mighty River Power sale.

An appeal is going to be heard by the Supreme Court in February and the government is confident it will win that as well.

The government is going to partially sell state-owned coal miner Solid Energy as well as the three power companies and expects to get about $6 billion in total.

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