Labour’s ideological obsession with state ownership rears up again. Stuff reports:
A Government plan to sell a state-owned asset considered vital to Pacific development is expected to be rubber-stamped this week.
The Sunday Star-Times understands an urgent meeting took place last week in Tonga, to be followed by another this week in Fiji, finalising plans to sell the 35-year-old Pacific Forum Line (PFL) to Singaporean firm Sofrana.
Founded in 1978, PFL was intended to encourage economic development in the islands and provide competition to ensure private shipping operators were unable to create a monopoly in the Pacific.
New Zealand and 11 island countries have equal voting rights in PFL, but practical control is exerted by New Zealand, Fiji and Papua New Guinea which between them own around three-quarters of the company’s shares.
So we only own 23% of it. But why is Labour insisting we own 23% of a shipping company?
McCully defended the decision to sell and said PFL no longer fitted its purpose.
“PFL was established to fulfil an important need, namely to offer regular shipping services that the private sector was not able to provide in the Pacific,” he said. “Since that time a great deal has changed, to the extent that the PFL no longer fulfils a number of its obligations. It now owns and operates no ships and participates in what is effectively a code share relationship with private sector shippers.”
Oh my God, so it is a shipping company that owns no ships! And this is an example of what we need to retain part ownership of? What next, an airline with no planes?
Despite once being a profitable enterprise, PFL has recently financially deteriorated, with losses totalling $14 million in the two years to June 2011.
Sounds like we’ll be lucky to find anyone to buy it. What would you pay for a shipping company with no ships?Tags: Asset Sales