NIUE AIRLINE DEAL GROUNDED

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By Bruce Hill

ALOFI, Niue (March 27, 2000 - Radio Australia’s Pacific Beat)---The Niue government said its deal with Coral Air to bring tourists to the island is dead.

Niue President Sani Lakatani backed a plan that called for Coral Air to acquire a turbo prop aircraft that would bring in tourists from Samoa, Fiji, the Cook Islands, Tahiti and Tonga.

But the plan was slow to take off the ground, and Government Secretary Terry Chapman said as far as Niue’s concerned, the deal is off.

"When we found out that they (Coral Air) had not concluded an actual lease arrangement of the aircraft that was supposed to be used, we made it clear to them that no further advances (would be made) until they can provide the service," Chapman said. "We have not received any alternative proposals."

The government is asking for the return of $200,000 it gave Coral Air to initiate the deal.

But the New Zealand-based airline appears to be ignoring Niue’s cancellation of the deal and is forging ahead with the plan as if it’s still alive.

Ray Young, a consultant for Coral Air, said if the arrangement falls through, the company will sue Niue for $20 million in estimated lost revenue.

But Chapman said it is the government that should be seeking legal action.

"They can try, but how can you lose revenue when you haven’t even traded?" Chapman said. "We are more annoyed than concerned about those allegations. They are the ones who should be concerned because there are aspects over the way they used the money that (means) we could legitimately bring serious allegations against them."

For additional reports from Radio Australia/Pacific Beat, go to PACIFIC ISLANDS REPORT News/Information Links: Radio/TV News/Radio Australia/Pacific Beat.

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