Foreign Airways pressure and secrecy at the top

By JAMES GARDINER

Foreign Governments are applying pressure to New Zealand over a joint venture between the Airways Corporation and Lockheed Martin.

The New Zealand Government regards letters it has received as too sensitive to make public, saying they may prejudice security, defence or international relations.

Airways and Lockheed have paired up in bids to run air traffic control systems in Britain and the United States - a marriage that has upset at least one big international player.

The previously secret correspondence came to light during an investigation by Chief Ombudsman Sir Brian Elwood into a complaint by the Herald under the Official Information Act. Sir Brian has backed State Owned Enterprises Minister Mark Burton's decision not to make the information available.

Mr Burton and Finance Minister Michael Cullen are shareholders in the state-owned corporation.

Mr Burton refused to reveal the contents of the letters - or who wrote them, on what dates, or which countries they came from.

However, the background suggests France is likely to have taken an interest. The Australian, British and US Governments may also be involved.

French company Airsys, which supplies and maintains the radar system now in use in New Zealand, was furious at being spurned in favour of Lockheed as a supplier of new equipment.

In a letter to Mr Burton, Airsys accused Airways of giving the impression there would be a competitive tender for the multimillion-dollar supply contract, then suddenly opting for Lockheed without other bids being called for.

Mr Burton effectively told Airsys it could sue the corporation if it thought it had grounds. Political sources said yesterday that could yet happen.

Australian-based Airsys executives brought their case to Wellington this year, lobbying the British and Australian High Commissions and French Embassy.

Sir Brian became involved after the Herald complained about deliberate omissions from papers Mr Burton issued to Act MP Rodney Hide in June about the Lockheed contract.

Some of the censored material was released, but turned out to be information already known and, in one case, contained elsewhere in the same set of papers.

Regarding the "correspondence with foreign states," Sir Brian said he was unable to give any indication of the nature of the documents "as that would tend to prejudice the interests which require protection."

When the Herald then requested the dates of the letters and the identities of the writers, Sir Brian said it was not just the content that might prejudice defence, security or international relations "but the fact that certain parties chose to make comment."

Meanwhile, Airways and Lockheed are, with British financiers Apax, part of the Novares consortium bidding to buy a 46 per cent stake in Britain's National Air Traffic Services. Infratil is financing Airways' involvement.