ALMOST A SCANDAL

Chronicle (Levin), 21 July 1949, Page 5

ALMOST A SCANDAL

Press Association)

Government Tackled Over OH loves

(Per

WELLINGTON, July 20. In .the House of Bepresentatives today, hlr Se'mple, answering Mr T. L. MacDonald (Wallace) said tenders were not c'alled for the supply of aviation spirit to the R.N.Z.A.E. because it was known no suppliers other than the British Petroleum Company, had modern storagp faeilities in New Zealand designed to ensure the most economical storage of this spirit. Contracts for a supply to National Airways Cor poration were arranged by the eorpor atiOn. Prices in this ease were not high er' than those paid under previous contracts. Mr MacDonald 's question was based on a reeent report that all aviation spirit was to be purchased from the Government eontrolled British Petroleum Company and that former contracts with oil companies had not been renewed. Mr Semple, answering Mr S. W. Smith (Hobson) said the Railways Department had entered into very favourable contract with the British Petroleum Company for supply of fuel oil. Tenders were not called but it was not. the policy to disclose the partieulars of such contracts. Mr J. R. Hanan (Invercargill) said the Government was trying to bluff the country that this company, in which the Government itself had a half interest, had better storage faeilities for aviation spirit but that was not so. Mr C. M. Boivden (Karori) said tbe matter was little short. . of ,a politicai seandal. The Government 's action was divorced from eommercial morality. It was giving this eoncern unfair advantages over competitors, establishing an exclusive market for it and encouraging petrol vendors to seek licences for B.P. pumps when they had been refused licences to sell the produet of the older companies. Mr Bowden said he understood that 8000 tons of steel wras made available to the British Petroleum Company to build special type storage tanks in Auckland, when other firms cotild get neither steel nor labour for such work. Moreover, a naval report said the Navy had allowed its •tanks to be used by the company for storage. Mr T. H. MeCombs (Lyttelton) said this company was a subsidiary of the Anglo-Iranian Oil Company which was established by Mr Winston Churchill with a large amount of British Government capital, to ' ensure fuel supplies for the Navy. The New Zealand Government was following the normal practice in buying aviation spirit from this company. It wonld aot be snggested that the Government would send re- . turned servicemen seeking loans, to private finance institutions and the Government naturally bought fuel from the company in which it held an interest.

Mr W, A. Sheat (Patea) said he was surprised that the Minister of Edu cation had deliberately avoided discussing one of the main eharges— preferential treatment .for the company in the nse of steel and eement which were ma terials in very short supply. The Minister had an obligation to deny that preferential treatment was being given or

to jnstify the diversion of those nxater- s ials. The Minister and Government would have something to answer for . at the eleetions in view of the; f act that they had denied every private ci J tizen the right to use- those* materials. Mr J.' T. Watts (St. Albans) said the; existing oil tanks of privately owned companies, were not full and had not been full for some time. The diversmp of steel and cement for the construetion of oil tanks. for a Government company when there was such a great HG6d foi* j additional sehool and public and other ; buildings, was no'thing short of a poli tical seandal.