Bay firm cited in Saudi payoff

A Saudi businessman got millions of NZ dollars because live sheep exports were banned. Photo / File

The Government paid Hawke's Bay company Brownrigg Agriculture to equip a farm in Saudi Arabia with millions of dollars of taxpayer-funded gear and livestock, the Labour Party alleges.

Saudi businessman Hamood Al Ali-Al Khalaf invested tens of millions of dollars in Hawke's Bay but lost the opportunity to export live sheep following the ban of live exports in 2003.

He has been "compensated" by taxpayers through a deal which involved air-freighting almost 1000 ewes to Saudi Arabia, One News reported.

The project has cost taxpayers $7.5 million, and a New Zealand business was used to get it all to Saudi Arabia.

The Government gave that job to Hawke's Bay brothers David and Jonathan Brownrigg, who have been doing business with the Saudi man for 25 years, One News reported.

The latest revelation about the Government's dealings with the rich farmer has prompted a "please explain" from Labour.

Labour's Trade spokesman, David Parker, told One News the Government needed to explain it, "otherwise it looks really murky".

"Given the closeness between the tenderers and their related business' interests in Saudi Arabia, it's all the more imperative that the Government answer questions to show that this tender was fair and transparent," Mr Parker said.

Jordan Williams of the Taxpayers' Union said the purpose of the tender process is to give taxpayers value for money. "Why on earth was the Government reporting back to this chap in Saudi Arabia?" he asked.

The Taxpayers' Union, a government-spending accountability watchdog group, said trying to secure a free trade agreement was "no excuse for a taxpayer handout to an individual businessman".

"If the businessman has a good case for compensation from our Government, that process should be managed by lawyers, not politicians," Mr Williams said.

It has also been reported that stockmen and a vet from Hawke's Bay travelled with the sheep.

The Government's international economic development agency, NZ Trade & Enterprise, has said the Saudi agri-hub provides a platform to showcase New Zealand's agri-tech abilities to the wider Gulf region, with a view to boosting the country's export revenues.

About 30 private New Zealand agri-tech companies, along with NZTE, the Ministry of Foreign Affairs and Trade, and the Ministry for Primary Industries, have collaborated on the project.

Primary Industries Minister Nathan Guy said New Zealand companies who had committed to the agri-hub were "making a sound investment"by being involved in the Saudi project.

Prime Minister John Key was in Saudi Arabia last month holding talks aimed at establishing a free-trade deal with Gulf states.

Mr Al-Khalaf has been involved in the New Zealand agriculture scene since the 1980s and invested millions in setting up live sheep exports to Saudi Arabia before the ban.