Asset sales - yes or no?
And then there were three. What started as a five-year, five-asset sales programme is starting to look distinctly threadbare.
OPINION: At last count there were three still standing, with Air NZ on the back burner and coal miner Solid Energy looking neither solid nor energetic.
To be frank, Solid Energy is looking as sick as a dog - more on that later.
And the net result is that the Government hope of banking up to $7 billion from the partial asset sales is fast receding. Taking Solid Energy and Air New Zealand out of the mix lowers the potential return by some $1b.
Add to that considerable uncertainty around the remaining three generator-retailers - Mighty River Power, Meridian and Genesis.
MRP's problems - mostly around timing but also value - have been well canvassed. The Maori Council's water claim is coming to a head, with a legal challenge possible, and there have been calls by residents and local government for a review of its Lake Taupo water consents that could affect its earnings. And then there is the future of demand from Norske Skog's Tasman plant.
Warning shots - bluff or not - from Rio Tinto over the future of the Tiwai Point aluminium smelter overhang Meridian and have implications for the rest of the electricity market if Manapouri power is suddenly freed up.
It all meshes into a web of uncertainty that will hardly be welcomed by the Government.
But that all pales beside the emerging disaster at Solid Energy, with hundreds of jobs axed and hundreds more on the line. It is no longer about how or when to float the company's shares but how to ensure it survives and turns its fortunes around.
Shareholding ministers Bill English and Tony Ryall must have some serious questions for the company's board - and could well ask themselves and their officials if their own oversight was really up to scratch.
Extra supervision has already been put in place - and eyebrows were raised in the Beehive at the apparent "push- back" by the company.
Chairman John Palmer has already announced he is going, and he will be replaced by Mark Ford. That should give the Government a chance to significantly revamp the board.
Meanwhile, there are some serious questions to be answered.
Were the company's ambitious expansion plans appropriate in a company so reliant on the (highly- cyclical) price of coking coal?
Were its overheads out of whack, including the cost of the head office in Christchurch?
Chief executive Don Elder was paid $1.36 million, according to the 2011 annual report, and 20 earned more than $300,000. In all, of the 1400 on staff, 368 had salary packages above $100,000, up from just 217 two years earlier.
Did it ramp up too quickly its capital expenditure - from $48m in the second half of 2010 to $77m in the six months to December 2011? Budgeted capital expenditure of $150m was this week slashed to just $50m.
Had it given due weight to the risk that demand from India and China could sag?
THE report by brokers Forsyth Barr, prepared late last year for Treasury, shows the extent of the problem. It valued the company at $1.6b against the $2.8b commercial valuation estimated by the board (though the latter was not a market value if it were sold). Of that about 75 per cent was attributable to the the coal operations.
It had forecast profits this year before interest, tax and depreciation of $204m on revenues of just over $1b.
But if revenues have instead fallen by $200m - about a third of total revenues - and costs had grown as expected, then the company would be looking down the barrel of a loss, which could be made worse by asset writedowns.
The final result for the year will be disclosed on Friday, but Dr Elder said decisions taken would achieve a turnaround in cash terms of $100m.
Even scarier were the numbers in the brokers' November 2011 valuation sensitivity chart. It showed the $1.6b valuation was based on a long-term currency value of US67c and a coking coal price of US$220 a tonne.
But with the dollar at US80c long term - close to its current value - and coking coal at US$200 a tonne the company would be worth somewhere between $100m and precisely nothing. If those prices came to pass, the Government's main problem would not be selling it, it would be giving it away.
To put that in context, last week coking coal prices fell to US$165 a tonne, tracking the fall in iron ore. Even that is historically very high.
Dr Elder has acknowledged the industry consensus is that the market bottom is some way off, and Solid Energy must plan to ride out the current conditions for up to two years.
That's at least two years when it will not be sold.
- The Dominion Post