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The Government can't guarantee that state asset shares won't end up in foreign ownership, State Services Minister Tony Ryall says.

Labour MPs at Parliament's finance and expenditure select committee grilled Mr Ryall today about Government plans for partial asset sales.

National intends to campaign before this year's general election on what it calls a "mixed ownership model" and has named Mighty River, Meridian, Genesis and Solid Energy as candidates for partial sell-offs as well as reducing its 75 per cent holding in Air New Zealand.

The sales would happen over three to five years, starting next year, depending on market conditions and the Government expected to reap between $5 billion and $7b.

The Government has talked up the ability of New Zealand investors to buy the shares but today Mr Ryall admitted they could end up in foreign ownership.

"You can't guarantee on those issues but these matters are being worked through and there are a number of options about what limitations there might be on various shareholders," he said.

Labour MP David Cunliffe said even if shares were initially sold to New Zealanders there would be no way of stopping them being on-sold to overseas companies.

The committee was also told that preparatory work on the asset sales would cost $6 million.

Treasury Crown Ownership and State Sector Performance general manager John Crawford said a contract for a Crown advisor would start late this month or early next month and scoping study advisors would then be hired. The total budget for external advice from now until the end of the year was $6m.

"It really is a matter of being prepared," Mr Ryall said.

It wouldn't be a waste of money even if "god forbid" National lost the election as the work would provide valuable information about the market the assets operated in and how the business were being run, Mr Ryall said.

Mr Cunliffe also raised questions about why the budget estimated dividends from the assets at 3 per cent when Mr Crawford said they were more likely to be in the mid-teens.

He suspected there was an attempt to devalue the return the taxpayer was getting on the investment to make sales more palatable.

"You've got a 3 per cent write down of dividends in the investment statement and you are now confirming a shareholder would have expectations of return around the early teens-mid teens."

Mr Ryall said he would look into the difference.

The committee was also told that the taxpayer could expect to lose millions in fees for the sales.

Fees, including for accountants and legal advice, for the Contact Energy sale were 1.8 per cent of the price. Mr Cunliffe worked out that for the planned sales the fee could be as much as $150m.

Mr Ryall said the Government would get good prices for the assets.

"This is potentially a very big series of sales and so if you take a percentage and multiple it across those proceeds yes you are going to come out with what looks like a significant number... but the importance of that is is that is about making sure we get good value within the terms of what the Government is expecting."