The final stage of the Government's partial asset sales programme, involving Genesis Energy next year, looks increasingly unlikely to proceed.
Speculation the sale may be shelved has mounted in recent days ahead of a citizens-initiated referendum over the next three weeks which asks voters whether they support the sale of 49 per cent of Mighty River Power, Meridian Energy, Air NZ and Genesis.
With the $3.9 billion selldowns of the first three of those companies already completed, market sources are questioning whether there will be sufficient investor demand for Genesis shares next year.
A senior investment banking source close to the programme told the Weekend Herald yesterday that the Genesis sale was "hardly likely" to go ahead as planned.
This week, Brian Gaynor of Milford Asset Management said there wasn't "a chance in hell" the Genesis sale would go ahead unless shares in Mighty River Power and Meridian, which have traded below the price investors paid for them, recovered.
He has also said the only way the Government would be able to sell them next year was if they were priced so "unbelievably low" as to offer huge ongoing dividend returns for investors.
Yesterday, Prime Minister John Key said the Genesis sale was still on track for next year.
He also accepted that the referendum that began yesterday will go against the Government's partial privatisation programme.
"It will go against us; everybody knows that," he said.
"We had a general election on the issue; a million people voted for National.
"The question is what will the turnout look like. If there's more than a million people who vote no then that would be interesting because that would be a different result to the election but let's wait and see," Mr Key said.
If the referendum attracted the same 56 per cent of eligible voter turnout as the 2009 referendum on Sue Bradford's anti-smacking bill, 61 per cent would have to vote against the asset sales programme to match the one million votes National received in 2011.