Govt’s letter dynamite —M.P.

Press, 13 April 1989, Page 2

Govt’s letter dynamite —M.P.

By

PATTRICK SMELLIE

in Wellington

A letter from the Government to the Commerce Commission written on March 31 told the commission it would be commercially unrealistic to reopen bids for Air New Zealand.

The Opposition spokesman on State-owned enterprises, Mr lan McLean, last evening accused the Government that its letter had tried to influence the commission’s decision. In the course of rebutting aspects of submissions by the former Minister of S.O.E.s, the letter said: “It is commercially unrealistic to suggest that the Government would have the option of reopening the sale and concluding a transaction on satisfactory terms with any other party, given the realities of competitive incentives.” Mr Prebble had argued that the bid for Air New Zealand, by a consortium including Qantas, Japan Air Lines, and American Airlines, .: should. ,be rejected because of its impact on Ansett New Zealand. The bid from British Airways could be reconsidered, Mr Prebble had said. - ■ <ce.-j>o9w- m ' Released yesterday by The-LMinister-■ -for— State-

Owned Enterprises, Mr Rodger, the letter said Mr Prebble’s submissions did not represent a Government position, and that “comments made in the submission regarding the sale process are not correct.” Officials had taken insufficient notice of the effect of the sale on domestic air routes, he said in the submission. But the letter, signed by the Minister of Finance, the Minister of S.O.E.s, and the Associate Minister of S.O.E.s said there was nothing in the sale to prevent further liberalisation of New Zealand aviation. “Indeed, retention of the capacity to implement measures which would enhance competition was absolutely fundamental to concluding a sale agreement, with the consortium, or any parties,” it said. Mr McLean said the letter was “dynamite,” showing the Government had tried to influence the commission.