Terralink receivership risk of another Incis
Bill English National Finance Spokesperson
15 January 2001
Terralink receivership creates risk of another Incis
The Government's decision to place Terralink into receivership has put the Landonline project at risk, National's Bill English said today.
"Terralink was carrying out the Landonline project under a contract to EDS, who in turn are contracted to another SOE, LINZ. Today's decision casts doubt over the future of that multi-million dollar project to create computerised maps of New Zealand.
"If this situation isn't handled properly it has the potential to turn Landonline into another Incis.
"This is the first time a State Owned Enterprise has gone into receivership, and that's bound to create confusion for those who do business with SOEs. This could even lead to SOEs paying higher interest rates, as borrowers reassess their levels of risk. That leaves less money for schools, hospitals, anything else.
"The Government must also give an assurance that the cost of appointing a Receiver and making alternative structural arrangements for Terralink are less than any bridging finance which might have got Terralink over its current problems.
"And Dr Cullen should explain his comments today that the Receivers will examine 'Whether the business should be sold in whole or in part.' That comment seems to be strikingly at odds with his repeated assurances that no SOEs would be sold under a Labour Government.
"I urge the Government and the Receivers to take great care in their handling of the current situation. If the Government drops the ball this could spell the end of Terralink and of Landonline," Mr English said.