When even the notoriously right-wing NZ Herald Editorial is pleading for Meridian not to be sold (just now), you know that the government’s asset sell-down is in trouble.
Add to that the fact that Mighty River Power shares are languishing three cents below their float rate and that a Meridian float is likely to knock them down further.
And then add the fact that the conflicts of interest involved in the sale of that generator are gathering negative attention from the most establishment corners, and John Key’s determination to continue seems even more bloody minded.
But that assumes that getting the best dollar possible is the plan here. It’s not. The planned sale of Meridian is about making sure this transfer of public wealth to private hands is as irreversible as possible.
Meridian’s huge value is its strategic place in the electricity system – like Mighty River it provides cheap low-carbon peaking power that can’t easily be replaced without resorting to costly to run fossil fuel plants (and suddenly it’s not low-carbon anymore).
It would be very hard to put the electricity system back together with both Mighty and Meridian sold down as both have generation that is very hard to replace. Genesis, on the other hand, has mostly fossil plants that are far more easily duplicated.
All of which means the government needs to get Meridian on the block asap if it’s to poison the well for reversal of its privatisation policy. Which is what it’s doing. And bugger the cost to taxpayers (both present and future), “mum and dad” investors, and consumers.
Of course NZ Power short-circuits this situation by not requiring reintegration of the electricity system to bring generators in line. But National is betting that large multinational shareholders will have much more leverage in negotiations with a future Labour/Greens government if they own the most strategically important generating capacity. Which is why, despite the pleadings of the Herald, the Meridian sale won’t be put on hold.
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