P.M. defends Bahrain coolstore venture

Press, 15 August 1980, Page 4

P.M. defends Bahrain coolstore venture

PA Wellington! The controversial Bahrain! cool store project was a! worth while one when it; was proposed, the Prime; Minister (Mr Muldoon) told. Parliament yesterday. He was answering Opposition criticism of the project,' which was a New Zealand-! Bahrain joint venture, during the debate on the estimates;

of the Prime Minister’s De--partment. ; Labour’s spokesman on trade, Mr J. A. Walding, said the decision to go into the venture seemed to have been a shocking one. “The Prime Minister was warned by all and sundry that this scheme would not work.” he said. But Mr Muldoon had “some rush of blood to the head” and was quoted a«; saying he was prepared to! “leap in where the Aiistra-1 Hans feared to • tread,” Mr Walding said. ! He wanted to' know what; advice the Prime Minister; had received from New Zea l land traders and why they’ had backed away from the; project. j Mr Muldoon: The answer is that the opportunity to get into a joint venture with the government of Bahrain was a worth while one. But cash-flow' difficulties arose when the cdolstore

!was' being built and business! iwas less than budgeted for. ! The Bahrain port author-! ity had put certain restric-l ■tions on trading which had! not been expected in thej I early stages’. i i Mr Muidoon said the pro-! Iject . had not generated the! ■ leash flow to enable it to ; meet its loan obligations. . The New Zealand Govern-

ment was now discussing with the Bahrain Government whether the latter should buy out the New Zealand interest, or vvhether it should continue as a partnership between New Zealand and Bahrain, the Bahrain Government buying out private Bahrain shareholders. It would not continue as a trading concent, but there was no reason why it would not continue as a coolstore, Mr Muldoon said. Mr F. Di O’Flynn (Lab., Island Bay); wanted to know how much New Zealand taxpayers’ money was involved. He believed there was about $1.5 million of New Zealand capital and guarantees for another $5 million. “A substantial loss seems likelv,” Mr O’Flvnn said. Mr W. W. Freer (Lab., Mt Albert) said the Primer Minister knew ‘.‘only too well’ that he. had made a “very bad mistake” i.n his commitment totheßahrain Coolstore. .... “In hrs own words this was going to be the Singapore of the Gulf, ,1s he still certain of that?” Mr Freer asked.

Mr Muldoon assured Parliament that the long-term propects for the project were good. “In the long run I. have

not the slightest doubt that this coolstore will be a successful concern.” he said. “I still believe that Bahrain will be the Singapore of IGulf.”