By JAMES GARDINER
The man whose advice led the Government to put Terralink into receivership could share in up to $1 million in fees as a result of being appointed one of the receivers for the state-owned enterprise.
Gary Traveller and Richard Agnew, of PricewaterhouseCoopers, took over the operations of Terralink after being appointed this week by the shareholding ministers, Michael Cullen (Finance) and Mark Burton (SOEs).
It was Mr Traveller's recommendation that the Government deny a further $1 million loan requested by the Terralink board that prompted the board to ask for receivers.
National finance spokesman Bill English yesterday questioned the appropriateness of Mr Traveller's appointment.
The Government hired Mr Traveller in November as special manager to review Terralink's position.
It had just advanced $1.5 million of a $2.5 million loan requested by the board, which was struggling to meet deadlines and budgets for a $12 million contract it had with Electronic Data Services to provide information for computerised maps.
"Why would you appoint a well-known receiver as an expert financial adviser?" said Mr English.
"It raises questions if they appoint an independent adviser who then ends up being the primary beneficiary of the advice ...
"Treasury's just been looking for an opportunity to put some SOE into receivership to prove a point. The officials have never been that happy with Terralink."
Mr Traveller has not returned calls for two days. But Mr Burton said Mr English's questions were shoddy and desperate innuendo.
He said Mr Traveller was appointed special manager because of his reputation and skills as a receiver. After spending more than a month with Terralink, he had intimate knowledge of the company.
Accountancy sources said the fees would be at least $500,000. Mr English said he had heard up to $1 million.
The architect of the State-Owned Enterprises Act, Sir Geoffrey Palmer, said putting Terralink into receivership sent the right sign to managers of other SOEs - that they lived or died by their commercial decisions.
But Sir Geoffrey, a former prime minister, said the 1986 SOE Act had passed its use-by date, and companies such as Television New Zealand should not be SOEs.
Sir Geoffrey applauded the Government's decision to put Terralink in receivership, saying the only strange thing was that no other Government companies had suffered a similar fate earlier, because of the risks inherent in business.
But he saw increased meddling by politicians and officials in SOEs' business activities as a problem.
"It [the act] was put in on the basis that the Government wouldn't interfere and would let it run, allowing commercial boards to make commercial decisions.
"Since 1986 there's been some pretty important cultural changes in the way Governments, both sets of Governments, handle these matters."
Sir Geoffrey said often-unqualified officials from the Treasury and the Crown Company Monitoring and Advisory Unit had tried to "micro-manage" the day-to-day investment decisions of SOEs.
Adviser in line for Terralink receiver payments
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