Ownership of Saudi Arabia abattoir still uncertain

Economic Development Minister Steven Joyce said the ultimate ownership arrangements for the abattoir have not been finalised. Photo / Warren Buckland

It is still not known who will own an abattoir in Saudi Arabia that is being built with taxpayer money, the Government says.

In response to questioning by Labour MP David Parker in Parliament this afternoon, Economic Development Minister Steven Joyce said it remained unclear whether the abattoir would be gifted the the Saudi government.

"The ultimate ownership arrangements for the abattoir have not been finalised. That is a matter between the Al Khalaf Group and the Saudi Government."

About $11.5 million has been spent on sending New Zealand sheep and equipment to businessman Hamood Al Khalaf's farm in Saudi Arabia, with $6 million of that spent on establishing a farm, including equipment and technology.

Foreign Minister Murray McCully has said it was partly done to appease Mr Al Khalaf, who lost millions of dollars during a New Zealand ban on live sheep exports.

His ill feeling was a major obstacle in the way of a free-trade deal in the region, Mr McCully said, and negotiations were now able to move on.

The farm would also act as a demonstration base for New Zealand agribusiness, and remove the threat of legal action.

Last August the Herald reported that documents released on the deal revealed that a key part of the farm kit-out - a state-of-the-art abattoir - could be gifted to the Saudi Government.

A briefing paper among hundreds of pages of redacted documents released by the Government notes that all 2000 slaughterhouses in Saudi Arabia are Government-owned.

"In this case, the Saudi Government appears prepared to allow Al Khalaf Group to build an abattoir that would then be gifted to the Saudi Government and leased back to the group," the document notes.

Meanwhile, Labour members of the commerce select committee have requested that New Zealand Trade and Enterprise officials re-appear before the committee to answer more questions on the Saudi agri-hub.

It follows a denial by NZTE chief executive Peter Chrisp that he had misled the committee during an appearance last week.

In response to questioning by MP Clare Curran, Mr Chrisp had denied that spending on the agri-hub had been suspended.

However, that answer contradicted a memo included in papers Labour received last year under the Official Information Act.

A memo from an unnamed person to Paul Stock, a deputy chief executive at the Ministry of Business, Innovation and Employment (MBIE), refers to a report written by the chief executive for an NZTE board meeting on August 20 and says "You may want to note the report's discussion [ ... on the agri-hub ... ] and that further spending is currently suspended."

Last night, Mr Chrisp issued a statement that said the use of the word suspended in the papers was not helpful.

"The board papers should have said that further payments were delayed until matters in relation to the abattoir development were resolved in Saudi Arabia. There was no active suspension by New Zealand Trade and Enterprise at any stage."