Govt sails to the rescue

Thursday January 16, 2020 Written by Published in Outer Islands
Govt sails to the rescue

The market has failed the people of the Pa Enua, says the finance secretary. Now government must steer a new course and – if all else fails – buy its own purpose-built passenger vessel. 

 

After repeated commercial failures creating a domestic shipping crisis through Cook Islands’ thousands of kilometres of passenger routes, now government is intervening to take the lead.

Finance secretary Garth Henderson says they’re well aware the social and economic development of the Pa Enua is being adversely affected by poor shipping services.

A disastrous period at the end of 2019 saw cargo shipping delays caused by adverse weather, while limited passenger transportation options left returning Northern Group islanders with no choice but to go back to New Zealand and Australia.

As a result, government has stepped up and is exploring a number of future domestic shipping options including the development of a “Cook Islands Shipping Roadmap” and a 2020 Pa Enua Shipping Charter.

If all else fails, the government will look at commissioning a purpose-built vessel to address the domestic shipping crisis.

Henderson said it was timely to move away from the market-based solutions, which had resulted in old ships that were not fully suited to the transport task. Options included a capital subsidy, through which government would purchase a vessel.

“If the solution includes a purpose-built vessel we expect that procurement of a vessel is likely to take up to a further 15 months inclusive of contracting construction and mobilisation in country,” he told Cook Islands News.

“Interim shipping services to the Pa Enua will need to be secured for the 18 months’ period.”

It’s apparent the $2.5m budgeted for a landing craft won’t be enough to buy the way out of the problem.

The Cook Islands Shipping Roadmap recognises the challenges facing the domestic shipping industry and implementing solutions to deal with issues.

For more than two decades, private market-based solutions to domestic shipping had resulted in inadequate shipping services that were unsustainable in the long term.

As a consequence, some government intervention was required, Henderson said.

A request for proposal for 2020 Pa Enua Shipping Charter had been issued through the Ministry of Finance and Economic Management, in the hope of procuring shipping charter services to cater for the Pa Enua in the Cook Islands.

Henderson said they were going to the market now with a request for proposals for an interim period of 18 months.“That will determine both interest and capability of any local companies under clear service standards,” he said.

Offshore companies could submit proposals and the government was aware of regional shipping service providers, he said.

“However, the request for proposals process is the best measure of interest, availability and capability of meeting service standards we want,” Henderson said.

Funding of $2.5 million was allocated to the Ministry of Finance and Economic Management through the 2019/20 Budget for the procurement of a landing craft to replace the landing craft operated by General Transport, which departed in March 2019.

But that procurement had been suspended as it did not address the range of challenges facing domestic shipping, Henderson said.

These funds could be used to address a broader and more sustainable solution to domestic shipping, Henderson said. 

Research and drafting would be completed in three months.

Prospective tenderers should register their interest to participate in this process, by registering on the Cook Islands Government’s E-Government Procurement portal.Tender documents are also available via the portal.Tenders close on Friday, February 7.

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