Train deal sparks row in House

Press, 15 August 1980, Page 4

Train deal sparks row in House

PA ' Wellington! The Prime Minister (Mr Muldoon) denied in Pallia-1 ment yesterday that there was anything improper in that a ’ former transport adviser in his “think, tank” was now working with the New Zealand agent for Hungarian trains sold to the : Government last year. He accused the Opposition! of the “character assassina-! tion” of Dr R. R. Allan, a! former member of his advisory' group who is now a' partner of an Auckland bttsi-i' nessman, Mr H. F. N. Low-j ndes, whose firm was agent: for the $33 million Hun-: garl.an train deal.

Mr Muldoon faced concerted Labour Party questioning on Dr .Allan’s role in the train deal during the debate on the estimates for the Prime . Minister’s Department.

The Leader of the Opposition (Mr Rowling) said the Government had made what seemed to be an inexplicable decision to buy the Hun-garian-rolling stock for Wellington commuter services in preference to cheaper but superior Japanese trains. The Treasury, the Railways, and the Ministry of Transport had shown a clear preference for the Japanese trains.

When announcing that the' Hungarians had won the ten-i der Mr Muldoon had said; they were offering better credit terms and that the; deal would encourage trade! with Eastern Europe. Mr! Rowling asked if Dr Allan had prepared the material for Mr Muldoon’s - news statement at the. time. Dr Allan had left the; Prime Minister’s Department!

Jin February and had started work in March with Mr Lowndes. This raised a number of interesting questions. Mr Rowling asked how: much commission Mr Low-; ndes’ firm had received for; the sale of the trains to the: Government and what had prompted the Government to. jprefer the Hungarian units' to the Japanese ones. ! Mr Muldoon said the deci-j jsion to buy t,he Hungarian! itrains had been made by the! :Cabinet based on the recom-l ’mendation of the Cabinet; ieconomic committee. j “Dr Allan had no other; role than as a member of; ! the Prime Minister’s Depart- ’ jment — one member of an! I officials’ committee which I the tenders and put! them in- front of the Cabinet ; ■economic committee,” he

I The Hungarian trains had (been evaluated by Railways I engineers I The Hungarian credit ! terms were more favourable jthan those offered by the i Japanese, and the Hungarians. had offered to sup- | ply British-made traction motors and related equipIment. There had been no “input” Son the matter from the ‘ Prime Minister’s Departement. The Department of I Trade and Industry had recommended that the Hungarian tender be accepted and the final paper put before the Cabinet economic committee had been prepared by the Railways and the Treasury and had said that the committee should make the decision. Mr Lowndes had approached Dr Allan some months after the deal and had invited him to work with

him after he had left the "Urie Minister’s Department. ur Allan had not drafted the news statement when i the award of the contract to the Hungarians had been announced. His role in the matter had been a minor one. i Mr Muldoon challenged the Opposition to make its I statements, about Dr Allan outside Parliament “or shut jup.” At one point during the ■ at-times rowdy debate. Mr Muldoon accused Mr W. W. : Freer (Lab., Mt Albert) of ; using his parliamentary i travel privileges in setting I up a business for his retire:ment. ■ Later, after Mr Freer had I spoken, Mr Muldoon drew i attention to “the member’s” involvement in a failed Sun-

iday newspaper venture. Mr Freer said he was at a i loss to know why he was ■ being criticised by Mr Muldoon. “It was very effective in .'destroying a former member lof this' House, Colin Moyle,” ;he said. “But I just want to Isay that 1 admit I was one .of a number of people associated with a Sunday news- ' paper that failed and I also isuggest to the Prime Minis-] Iter that he may remember’ : that he was a director of ; Matai Industries that also .failed.” ' The Deputy Leader of the I Opposition (Mr Lange) : blamed Mr Muldoon for the lack of order in the House. ' He told the Chairman of I Committee (Mr Luxton),“the I difficulty that we have in j maintaining order in this I I House is that you sit next !to that yabbering i rjector I who poses as the Prime Minister.”.