Govt stops Weka sale under proposed terms

Press, 18 February 1989, Page 8

Govt stops Weka sale under proposed terms

By

OLIVER RIDDELL,

in Parliament

The Government has stopped the recently announced sale of the Shipping Corporation vessel Weka to the Pacific Forum Line.

It had been announced that the Weka was to be sold to the line as part of the corporation’s sale of its wholly-owned subsidiary of Eckington, Ltd. But the Minister for State-Owned Enterprises, Mr Rodger, said the sale of the Weka would not be approved under the proposed terms. His approval is needed under the Shipping Corporation’s statement of intent to Parliament. Mr Rodger said the Government had been greatly concerned over the sale decision, both because of its impact on Government aid and because of possible ramifications for the sale of the Shipping Corporation. The Pacific Forum Line was partially funded from New Zealand aid funds so, effectively, the purchase of the Weka by the line

could only be achieved through a contribution from those funds. It had always been the Government’s intention that if the Weka were sold, those funds would be available only if an agreement on international crewing levels were forthcoming, he said. In this way the continuing costs of running the Weka could be met without further aid support. A letter from the then Associate Minister of Foreign Affairs, Ms Wilde, earlier this year had clearly tagged the availability of external aid funds to such an agreement, Mr Rodger said. She wrote, “The funds will not be made available until the Government has sighted documentary evidence that the Pacific Forum Line has reached

agreement with the relevant unions on manning levels and conditions for the vessel which approximate international standards.”

Mr Rodger said that the negotiating parties had in-

dicated at that time that they believed there was a good chance that such an agreement would be embraced by the unions. But it was now apparent that the parties had not made a crewing agreement along international levels a mandatory part of the sale agreement. “The agreement .requires of the line only that the new owners will use their ‘utmost endeavours’ to achieve a crewing level agreement,” he said. “This is not in the Government’s view a satisfactory arrangement.”

The Weka could not be sold to the line on anything less than international crewing conditions.

The Government did not believe that it was in the interests of its external aid programme that aid moneys be channelled

into the continuing operation of the Weka. Equally important was the fact that if it allowed the vessel to be sold without a firm commitment on crewing levels, this could jeopardise the Shipping Corporation’s sales process, Mr Rodger said. It was well known that crewing levels comparable with international standards were a main factor for prospective buyers of the Shipping Corporation. The failure of the parties to reach a definite agreement on that issue could raise uncertainties in the minds of bidders for the corporation, and the corporation’s creditors.

“In the Government’s view this uncertainty must not be allowed to occur,” he said.