MORE CRITICISM.

Auckland Star, Volume LXI, Issue 237, 7 October 1930, Page 15

MORE CRITICISM.

MCDONALD MINE LEASE.

RENOWN -COMPANY'S

ATTITUDE. MINISTER'S STATEMENT DENTED. •(By Telegraph.—Parliamentary Reporter.) WELLINGTON, Monday. The leasing of the McDonald mine was Birain questioned in the House of Representatives late to-night, during consideration of the Mines Estimates. An adverse amendment, moved by Mr. W. P. Endean (Reform. Parnell) was not pressed to a division. Mr. Endean moved for a reduction of '£3 in the total vote on the ground that tlie Government did not deal with the •JlcDonald state mine to the best advantage of 'the State, in that it did not obtain a sufficient royalty for the coal, apart from the loss on income tax from Glen Afton Collieries, Ltd.; that the Government unduly favoured Glen Afton Collieries, and guaranteed a right-of-way to that company which might mean a further loss of 2d a ton for way leave; and that the mine should have been dealt with by public auction or public tender, .■whereas it had been leased to one mine without competition, although another mine made a better offer. The Hon. A. J. Murdoch, Minister of Mines, suggested that the member for Parnell diefnot understand the position. It was a Reform Government which decided, in 1925, that the McDonald mine should not be worked by the State. When he took charge of the position there was £90,000 debit against this mine, and negotiations were carried on for its utilisation. Then the Auckland Power Board appealed to the Government for assistance in a coal contract, and he saw a prospect of paying interest on the £90,000 and several thousands towards the actual debit each year. He was led to believe that owing to the Arapuni failure the situation had become critical,* and he considered it good business to lease the mine. No other mine in the locality got a better royalty. Mr. Endean: Yes, the Renown and Wilton. Renown Company's Royalty. The Minister replied that the Wilton was not operating, and as for the Renown, the member should know to whom its royalty was paid. It paid 1/ a ton royalty, but he ventured to say that only half'went to the landowner, tho other part going to a small group who started a separate company. Mr. F. Langstone (Laboiu-, Waimarino): Are they in the Renown company, too? The Minister: Yes. Mr. Langstone: Then they are paying themselves. The Minister added that the McDonald mine had been well leased, and there was a provision that if the Auckland Power Board contract ceased the Government had a right to revise the lease, when it could charge a royalty up to 1/ a ton, which "was the maximum, permitted under* the statute. ' Mr! W. L. Martin (Labouu, Raglan) asked the Minister whether he was prepared to throw open for selection an area reserved in connection with the McDonald mine. The Minister said he would go into the question, and if it were feasible to do so he would give favourable consideration to the leasing of the areas. An inquiry was made by Mr. W. E. Parry (Labour, Auckland Central) as to whether negotiations were made for the lease of the McDonald mine prior to the Arapuni breakdown. The Minister: After, as far as I was eoncerned. Mr. Parry asked also whether the offer to lease the mine had been made first to the Renown Company or to Glen Afton Collieries.

Power Board's Telegram. Mr. Murdoch replied that he • had offered tho chairman of the Ken-own Company the same terms as -were offered the Glen "Afton Collieries, and the chairman had replied that he could not handle the McDonald mine. On July 11 last the Prime Minister had received the following telegram from the chairman of the Auckland Power Board:—" We are informed Eenown Colliery prepared supply coal same conditions as Glen Afton and pay Government one shilling royalty. We have already investigated all sources supply, and are firmly convinced that Glen Afton is only company which can give binding guarantee of full supply with certainty of prompt fulfilment. For this reason -we are not prepared contract with Eenown." The Minister declared that throughcut the cards had been on ;fche table. Mr. -Parry said that from the Minister's statement'he understood the chairman of the Eenown Co. had turned the proposition down. The Minister: Exactly; he could not ianso it. Mr. E. Semple" (Labour, Wellington East): Why did not the Department call for open tenders ? It was not a question of influence, was it? The Minister: Not at all. Mr. Endean said the Minister was absolutely in error when he said that on the second occasion the Renown Collieries would not take on the proposition. He believed an offer was made to the Minister on the basis of one shilling a ton, and the managing director was instructed to take it on those terms. The Minister: That is not so. Mr. Endean: That is the position as I understand it. '•The Minister repeated that the chairman of the Eenown Company did not say he would take on the McDonald mine. Bad Management Denied. Mr. Parry declared that whatever Lad taken place there had been bad management somewhere. The Minister; Did you expect us to get mrfe royalty ? Mr. Parry: It would be the right and Proper thing to get as much as possible. It seems to me the business was conducted in a slovenly way. Mr. Martin eaid it seemed to him the chairman of the power board had held a pietol at the head of the Minister, and le asked whether there was any power behind the transaction, which had been conducted in an exceedingly slipshod manner. Sir Apirana Ngata: Was there anything shady about it? Mr. Martin: I do not impute any ulterior motives to the Minister or Ministry, and I makeno suggestion that there was anythins , behind the transaction. The public, however, expect the Government to conduct its business upon the very highest standard. Mr.- Murdoch vigorously denied that Negotiations had been slipshod i" any v >-ay. On the contrary, they had been conducted to the best, advantage. ' ■ Mr. Endcan's' motion was not" pressed to a division.