Government slams door shut on a third shipping license
It has been revealed in a recent letter by the Ministry for Transport that many applications for a third international shipping license has been made and have been declined.
The public concern over the Minister for Transport’s decision not to grant a third international shipping license in the face of many applications, should be raising eyebrows at the Audit office.
The refusal has raised issues in the public arena of the Minister’s legal authority to issue the second license to a company, Tai Moana Ltd, which is not a shipping company (its Directors import timber and paints) and claims of government creating a monopoly by Reef Shipping as it owns the two ships involved.
The Times understands that on 26 September, the Minister declined an attempt to apply for an international shipping license although oddly, this news was not conveyed to the applicant until some six days later.
In delivering the Minister’s response, the Ministry’s letter apparently advised that many other applications (quantity not specified) had been received and that other applications (no specific number mentioned) had been referred through other Ministers (not named).
According to the letter from the Ministry, the Minister remains convinced that the current two international shipping licenses issued, provide the capacity to meet the present volume needs of the country as well as ensure sustainability of the service.
The Times understands the Minister’s view expressed earlier to an importer was that the holder of the second license, Tai Moana, had no interest in a ship therefore no breach of the law had occurred and with the company being a local consortium, independent of Reef Shipping, no monopoly existed.
A key to sustainability is that the service must be affordable for the simple reason government has no control over the operating costs of the ships (fuel/wages/insurance/maintenance). In the absence of competition, affordability is only possible through regulation to keep other costs to clients down. Is the Minister convinced that ownership of both ships by the same company (Reef Shipping) will ensure affordability? What assurances have been given by Reef?
Also of interest will be which ship eventually gets the contract from the new Chinese fish processor to ship 500 tonnes of deep frozen Tuna a month out of Rarotonga. The shipping company which secures this contract will be able to lower cargo fees to the Cook Islands as the ship will no longer be returning empty. -Charles Pitt

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