Crucial subsidy lies idle

Thursday February 23, 2017 Written by Published in Politics
Taio Shipping’s vessel Lady Moana is one of only two small ships left to serve the Pa Enua. 17022336 Taio Shipping’s vessel Lady Moana is one of only two small ships left to serve the Pa Enua. 17022336

A $500,000 budget allocation to subsidise domestic shipping during the 2016 financial year is unlikely to be used any time soon, because nothing has been done to determine how the scheme will work.

The Ministry of Finance says a technical expert to design how the subsidy scheme will be structured has yet to be engaged. The ministry blames understaffing for being unable to focus on the subsidy, which amounts to $1 million over the 2016/17 financial year.

Prime minister and minister of Transport Henry Puna said earlier this week that it was about the time Taio Shipping took delivery of its new vessel Moana Nui last year that government looked at tendering the subsidy.

Puna said the subsidy was available and “sitting in government coffers.”

With the Moana Nui having gone aground on the reef at Nassau, Puna says government will need to look at “something else” now.

“It’s probably a bit too early to be talking about this now, but we actually want the private sector to take the lead and make use of this subsidy that government has set aside in order to help the (Pa Enua islands shipping) service - to implement the service.”

Puna disclosed “somebody” was talking with government and looking at domestic shipping options which would involve “our friends from French Polynesia.”

“So we are helping them achieve that for the good of the northern group islands.”                

The prime minister would not name the person in discussions with government on alternative inter-island shipping.

“(I) can’t go into details except that somebody with initiative is thinking outside the box and we are encouraging them to do that.”

The Pa Enua is currently serviced by just two small ships, both owned by Taio Shipping which has been operating here for over 20 years. 

Managing director Tapi Taio says it’s unbelievable government is looking to financially assist what would largely be a foreign entity when his company has already tried and failed to get fuel subsidies that would reduce Pa Enua freight and fares by 40 per cent.

“Why does the government get involved in something it knows nothing about? So now he (the PM) is going to sell us to the Tahitians. Like selling us to Air NZ by giving them a subsidy so Air NZ can make a profit.”

Taio says the prime minister needs to be forthcoming and reveal with whom the government is having shipping discussions.

“The public has a right to know where this money went, or is that the privilege of only a few?

We are open to be sold - we have a price to sell our company. We can negotiate the whole thing through my lawyer and we can have a simple change. Then he can bring all his Tahitian friends in.”

According to Taio, government is failing to advise of opportunities that are available such as the 2016 shipping subsidy.

“No-one tells us these things. Where is last year’s money? Who got that money?

If last year’s money has been spent, where was it spent? That is my question.”

The Opposition coalition office confirmed that two years ago it lobbied the government to provide Taio Shipping with a $360,000 a year fuel subsidy that would have in turn reduced costs to the Pa Enua. Opposition coalition chief executive George Turia says the initiative was strongly supported by deputy prime minister Teariki Heather, who made a cabinet submission to this effect. It was unsuccessful as, “in the end the Tiare Taporo was given preference.”

Turia says the issue of domestic shipping has been politicised by the prime minister, with Taio being ostracised from any assistance for being a former minister in a Democratic Party government.

“It’s not about him Tapi, it’s about the people in the north who he provides a service for.”

Taio says the northern islands would be hugely affected if his shipping company were to shut down. With no regular air service, Taio’s two vessels are a lifeline for those islands, particularly Penrhyn.

“We don’t take aircraft fuel there anymore because there are no flights unless it’s a charter from Manihiki.”

Meanwhile, 21 people from Penrhyn are bound for Rarotonga aboard the Lady Moana, leaving less than 100 people on the northernmost island. With a population steadily decreasing, Taio says the volume of cargo to Penrhyn just doesn’t justify the cost in fuel to sail 2,744kms there and back.

“That’s why we need the fuel subsidy, but we haven’t even been given the chance to apply for it.”

Once insurance issues are sorted, Moana Nui will be floated and transported to either Samoa or American Samoa to undergo repairs. Taio says the ship became crippled after ropes from commercial fishing boats fishing in the north became entangled in the propeller.

“The ship couldn’t be controlled and it drifted on to the reef.”

Taio says he has photographic evidence of the ropes that were eventually cut from the ship’s propeller.  


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