Govt confirms shipping subsidy

Monday April 16, 2018 Written by Published in Economy

The government has confirmed the availability of a shipping subsidy for vessels servicing the northern group islands, with the first subsidised voyage having taken place earlier this month.


The shipping subsidy was undertaken as a closed tender with three tenderers.

Financial secretary Garth Henderson said two applicants had been successful, with the first departure by Taio Shipping last month.

“Negotiations are currently taking place with the second supplier – it is hoped that they will depart in June,” he said.

“A detailed shipping voyage schedule will be announced once contracts and dates are finalised.”

Henderson confirmed that a bid by Pacific Schooners Ltd, owners of the Tiare Taporo, had not been considered because at the time its bid was submitted the vessel did not have a valid operating licence. A licence was a prerequisite for bidding, Henderson said.

Henderson said the subsidy, which was first announced last year, would provide 40 per cent of operating costs for each voyage to the northern group.

He said the aim was to increase the reliability of shipping services by requiring a departure from Rarotonga within three days of the contracted date, weather permitting, rather than suppliers waiting until the boat is full before departing.

“It is expected that more reliable departures will improve resource planning and receipt of services in the northern group,” Henderson said.

“Furthermore, the suppliers are required to decrease freight and passenger rates by 10 per cent for subsidised voyages. The impacts of this will be closely monitored by the shipping subsidy working committee.”

Henderson said the Ministry of Finance and Economic Management, the Office of the Prime Minister and the transport ministry would work together to monitor the shipping companies under the shipping subsidy working committee.

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