Defence Minister dodging ship contract issue

The Minister of Defence is playing games regarding information on the Project Protector contract to build a multi-purpose ship for the Navy, says National's Justice spokesman, Richard Worth.

Dutch shipyard Merwede is building the ship under contract to Tenix, but Merwede is for sale and its design team has been placed in bankruptcy.

"First of all, the answers to 14 written questions to the Minister are overdue," Mr Worth says. "Then, at a select committee hearing todayhe contradicted himself.

"He refused to say when the Government would sign the contract, except that it was 'close' and the only outstanding issues were 'technical'. The problem was he had already said, in answer to written questions, that there were no outstanding 'technical ' issues.

"This is worrying because a lot of taxpayer money is at risk."

Mr Worth says that in a curious twist, Merwede had failed to gain approval at an earlier stage of the tender process but ended up building the ship for Tenix.

"The committee was told that the possibility of Tenix, an Australian-based company, taking over the building of the ship by moving into the Dutch yard could not be ruled out. How Tenix could do that when Merwede is owned by another company beggars belief and raises a host of legal issues.

"Presumably, the proposed contract between the Government and Tenix contains 'force majeure' clauses but they will not be able to be relied on because the default of Merwede has already been anticipated as a possibility by the Government.

"The Government should not sign the contract until it is satisfied the contract can be performed on time and within budget. That is not looking likely at the moment," Mr Worth says.

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