By EUGENE BINGHAM political reporter
Political concerns about the Airways Corporation bid for the British air traffic control system may halt the deal.
Documents central to the venture have left key ministers with cause for concern about the ethics of the state-owned enterprise's approach to the bid.
Officials who have spent three days studying the papers were called to Prime Minister Helen Clark's office yesterday to brief her, Finance Minister Michael Cullen and State-Owned Enterprises Minister Mark Burton.
As shareholding ministers in Airways, Dr Cullen and Mr Burton will be called upon to sign a "shareholder agreement" before the company formally submits a tender with its joint venture partners.
Sources told the Herald last night that the ministers were giving serious consideration to blocking the deal by not signing it off.
It is understood there are reservations about the deal's structure and that the corporation may be straying too far from its brief to concentrate on safe management of New Zealand skies.
Airways has linked up with US giant Lockheed Martin, a British financial backer and Wellington-based utilities company Infratil in a consortium which will make a pitch for the National Air Traffic System to be partially privatised by the British Government this year.
New Zealand First leader Winston Peters has alleged that Airways chairman John Maasland, chief executive Craig Sinclair and two other managers were set to profit personally to the tune of $30 million if the bid was successful. They have denied any wrong-doing.
Mr Burton confirmed yesterday that an early draft of the consortium contract had included significant incentives for executives, but Mr Maasland took this out because it would not be acceptable to the corporation or the Government.
Mr Maasland said last night that he and the board had vetoed the executive benefits, but he was reluctant to discuss the reasons.
"It was only a proposal put forward by one of our partners, the funding partner in the United Kingdom," he said.
The latest versions of the contract would provide the company with a windfall of more than $55 million.
Mr Sinclair and two other executives would work in Britain on secondment for five years.
It is understood the deal would form the basis of the "shareholder agreement" which would have to be approved by Mr Burton and Dr Cullen before a tender was submitted.
The Government is angry it was not told about the extent to which the deal had been developed. Helen Clark is said to have lashed out at Crown Company Monitoring Advisory Unit officials at yesterday's meeting for their failure to keep the Government better informed.
Meanwhile, Mr Peters told Parliament yesterday that he was taking legal advice over a claim by Mr Sinclair in a staff e-mail.
The Herald revealed that Mr Sinclair accused Mr Peters of being "recruited" by a French rival of Airways, an allegation Mr Peters strenuously denies.
Mr Peters said he received an apology from Mr Sinclair yesterday but would still consult his lawyers.
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