Government says IRL finances improving

Steve Maharey

Fresh fears over the perilous financial situation of the crown research institute Industrial Research Limited (IRL) have emerged but the Government minister in charge says any concerns are out of date.

IRL posted a $5.37 million deficit for the year to June on operating revenue of $60.1 million, with nearly $1 million in redundancy payments part of the deficit.

The Crown Company Monitoring Advisory Unit (CCMAU) provided a briefing on IRL to the incoming Government in October, fresh details of which have now cast fears about IRL's future.

"We are of the view that there is a strong possibility that early in the 2006 calendar year Industrial Research Limited's operating cashflow will be insufficient to meet its debt servicing costs," the CCMAU said in a briefing obtained by National Radio and reported today.

But Crown Research Institutes Minister Steve Maharey said new contracts gained by IRL in the United States had eased the financial pressure.

"The reason that CCMAU were concerned at the time is that IRL have two key subsidiaries and they were not at that time looking like they would be bringing in the kind of income that had been anticipated," he told National Radio.

"Since that time the situation has improved quite substantially and IRL now is in a very positive cash situation so those predictions thankfully have come to nothing."

The Government was not providing any additional financial support to IRL.

IRL chairwoman Liz Coutts said the report into it was historical.

She did not believe the company would default on payments and said its financial position had improved since the report was written in October.

Property sales in Auckland were also underway.

Concerns about the government science company flared up late last year when chief Nigel Kirkpatrick resigned after three years in the position.

National Party science spokesman Paul Hutchison has called for a select committee inquiry into IRL.

- NZPA