Defence Minister Mark Burton confirmed today that the HMNZS Charles Upham has been sold.

"This vessel, which unfortunately was given the name of our most decorated war hero, has never carried out the sealift role for which it was originally acquired," Mark Burton said.

"The vessel was purchased in 1994 for $14 million. Another $7 million was spent on modifications and the vessel was commissioned into the Royal New Zealand Navy as the HMNZS Charles Upham in October 1995.

"Despite this expenditure, in sea trials the following year the ship broke down in heavy weather and rolled alarmingly. As a result the vessel was tied up awaiting a decision on its future.

"The National Government's 1997 Defence Assessment included a proposal to proceed with further expensive modifications. However, typically, this was nothing but talk – no funding was made available and the vessel was instead offered for charter on the commercial market. In May 1998 the HMNZS Charles Upham was chartered to the Spanish shipping company Contenemar – and was reduced to hauling citrus fruit around the Mediterranean.

"The Sealift Review commissioned by this Government estimated the cost of the necessary modifications to enable the vessel to possibly fulfil its intended sealift role at $35-40 million," Mark Burton said.

"This was not considered to be a prudent or responsible use of defence resources. As part of the 8th May 2001 Defence decisions, the Government announced that the Charles Upham was to be sold at the end of its current charter arrangement.

"That sale process was concluded on Friday 29th June. The vessel has been sold to Contenemar for $8.6 million and is now registered as the Don Carlos. The world market for second-hand vessels of this type has fallen considerably in recent years and the sale price achieved is considered realistic.

"A study to determine the optimum composition of the Maritime Surface Fleet is due to be completed by September. The requirement for an appropriate sealift capability is being considered as part of that review. In keeping with other such defence decisions, this government, in contrast to the last, will then make appropriate decisions based on identified priorities and capability requirements.

"Meantime, the NZDF will continue with the past practice of chartering vessels as and when required," Mark Burton said.

Ends

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