RMI MINISTER FOR TRANSPORT AND COMMUNICATIONS LEMARI

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GOVERNMENT OF THE REPUBLIC OF THE MARSHALL ISLANDS Ministry of Transport and Communication PO Box 1079 Majuro, MH 96960 Marshall Islands Tel: (692) 625 8869 Fax: (692) 625 3486

PRESS RELEASE February 19, 1999

UNVEILS "RADICAL" NEW PLAN FOR DOMESTIC SHIPPING

The Marshall Islands Minister of Transportation & Communications, Kunio D. Lemari, has unveiled a radical new plan to improve domestic shipping services in the Marshall Islands. Cabinet approved the new domestic shipping policy on 28 January 1999. The new policy reflects the Government’s commitment to privatization.

"The Government recognizes the central importance of domestic shipping to both the economy and social life of outer island Communities", Mr. Lemari said. "In the past, the Government have tried to meet this need by providing shipping services itself. Our new approach will be to encourage the private sector to provide these services."

"The Government acknowledges that services to many outer island communities are not commercially viable, and will offer financial support to ensure that adequate services are provided. We will do this by offering a number of service contracts to private sector operators. Under these contracts, the Government will provide a subsidy to the operator in return for a commitment to provide regular, scheduled service. The contracts will be awarded using an open and transparent competitive tendering approach."

Mr. Lemari declined to discuss the level of subsidy that will be required. "It would not be appropriate to discuss subsidy levels at this time," he said, "because we will be asking contractors to bid on subsidy levels. However, we have done a lot of homework, and are confident the cost to Government will be less than the cost of acquiring and operating new vessels ourselves."

Further details of the plan are available from the Ministry of Transportation and Communications, which has prepared a brochure for distribution to potential operators and the general public. The closing date for expressions of interest has been extended to March 5, 1999.

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