The benefits of mixed owners

The Herald reports:

State-owned MightyRiverPower wasted around $100 million on an unnecessary hunt for natural gas in the last decade, its chief executive Doug Heffernan told the commerce select committee.

He was answering questions from Labour MP David Cunliffe for examples of decisions the company might not have made, had it been partially privatised. …

Cunliffe and colleague Clayton Cosgrove peppered Heffernan and MRP chair Joan Withers with questions designed to demonstrate the company has operated no differently than it would have as a private listed owned company, despite its government ownership. …

Asked to nominate decisions that would have been made differently, Heffernan volunteered the company should not have spent around $100 million searching for natural gas in the mid-2000’s, when its subsequent strategy has seen the company concentrate instead on geothermal generation.

“We should have stopped earlier, or not started at all,” said Heffernan. “Under private sector disciplines, we would have corrected much faster. From my experience, in a listed company environment, that would not have happened.”

Having private shareholders and the discipline of being a listed company will make a difference. This is in fact the main rationale for the part-sales (in my eyes), rather than the debt for equity swap.