Air ambulance rivals too cosy says commission

By Simon Hendery

Two rescue helicopter operators who fought a bitter battle for emergency work contracts two years ago have now been rapped over the knuckles for being too friendly.

The Commerce Commission says St John Ambulance and the Auckland Rescue Helicopter Trust breached the Commerce Act by colluding over Government tenders for air ambulance work.

And it says St John and the trust acted together in trying to squeeze out a rival Auckland road ambulance company which was also bidding for Health Funding Authority and ACC contracts.

A row erupted between St John and the trust in 1997 when St John bought a $1.7 million Sikorsky helicopter, ditching its agreement to use the trust-owned air ambulance.

At the time, the trust said the move could force it out of business, but it later won the contract for accident and search and rescue jobs while St John successfully tendered for hospital transfer work.

However, the Commerce Commission said yesterday that the two organisations had colluded during the tendering process, reaching an agreement that only the trust would tender for ACC work, and in turn it would leave Health Funding Authority work for St John.

The commission said the trust also agreed to a St John request to terminate a contract with a rival Auckland ambulance company EMT Ambulance New Zealand.

After a 12-month investigation the commission has stopped short of prosecuting St John and the trust, saying their collusion had little effect, although it could have potentially raised the cost of Auckland ambulance services.

Instead, the commission has reached a settlement under which the two organisations have agreed to acknowledge they may have breached the Commerce Act, terminate their arrangement over tendering for contracts, and stop colluding against other operators.

It is the second time in 18 months that St John has run foul of the commission.

Last March, while St John and the trust were still feuding, the commission accused St John of acting anti-competitively by sending its own helicopter to some 111 callouts rather than passing details on to the trust.

Auckland St John chief executive Keven Tate said that although it acknowledged the potential breach of the law, its officers were disappointed with the findings.

St John had acted in good faith after various parties had urged its officers to work more cooperatively with the helicopter trust for the good of the community.

The chairman of the trust, Malcolm Beattie, is overseas and could not be contacted.