$5M savings to taxpayers as result of Stateships closure

20/6/97

Transport Minister Eric Charlton said today that Western Australian taxpayers were saving around $5 million annually following the closure of Stateships and that took into account the cost of sponsoring the new North-West coastal service.

The Minister said that by closing Stateships in June 1995 the Government had relieved Western Australians of a major financial burden, yet preserved a coastal shipping service to North-West ports.

"A large part of the annual cost to run Stateships was due to arrangements set up by the previous government when it entered into contracts with Westpac to fund the building of three ships at ASI, Coogee," Mr Charlton said.

"This agreement provided for Stateships to charter these vessels for 10 years."

The Minister said that up to June 1995 the agreement had cost the State $27.9 million in lease charter payments, plus huge annual operational losses. Stateships also faced the prospect of paying out a residual of $US20.5 million due in the year 2000 at the end of the charter arrangement.

It had also had an additional $US26.2 million in charter payments.

"Western Australians had been locked into a deal which would have cost them $75.5 million, even allowing for a residual value of $US4 million for each ship when the charter term was due to end in the year 2000," the Minister said.

"It needs to be noted that these vessels could have been built and financed elsewhere at a greatly reduced cost."

Mr Charlton said the Westpac charter arrangement was finalised by way of a one-off payment of $29.9 million.

He said the cash requirement of the West Australian Coastal Shipping Commission had been as follows:

1988-89 $14.9 million

1989-90 $12.68 million

1990-91 $13.8 million

1991-92 $14.59 million

1992-93 $16.95 million

1993-94 $19.23 million

1994-95 $23.05 million

1995-96 $19.79 million

1996-97(Estimated) $7.89 million (Including BAAC settlement).

Mr Charlton said the new Department of Transport sponsored North West Coastal Agreement cost $4.94 million in 1996-97 and an estimated $4.46 million in 1997-98. The service gave the people of the North-West the specialised service Stateships was originally set up to do.

Media contact: Doug Cunningham 9321 7333