MNZ has spent $27.7 on Rena cleanup

Maritime New Zealand (MNZ) has so far drawn down $27.7 million of the $35 million contingency fund provided by the Government following the Rena disaster.

The disaster last October when the cargo ship Rena hit Astrolabe Reef off Tauranga led to this country's largest maritime oil spill, with overall clean up costs estimated back in February to be around $130 million.

The country's oil pollution fund, which had been run down by successive governments for the past dozen years and was around $4 million at the time of the disaster, has been depleted.

The Rena grounding came as MNZ was working on a review of its own funding, and that of the oil pollution fund.

MNZ expects it will need up to $35 million to cover its expenses incurred directly through the Rena response in the current and next financial years.

It has also received $1.25 million from the Ministry of Transport to help catch up on work delayed due to staff working on the Rena response. A discussion document on the MNZ funding review is now scheduled for release in June.

Negotiations between the Government and the Rena's owners to recover the cost of the clean up operation were continuing, a MNZ spokeswoman said.

The agency is also proposing that funds raised from oil pollution levies will rise from around $3 million a year now to around $5.1 million for the next three financial years.

That would be necessary to reverse the business as usual overspend which had depleted the fund's reserve to an unsustainable level, and to have enough funds to buy needed equipment, a consultation document on the oil pollution levy proposal said.

The overall MNZ funding review is being carried out after a value-for-money review in 2010 recommended it be carried out to determine a transparent and sustainable funding framework.

In 2011 MNZ had income of nearly $30 million, and spent $33 million.

MNZ's statement of intent said 56 per cent of its funding now came from a levy on the maritime industry, with 34 per cent from the Crown and 10 per cent from direct user charges.

The current level of funding would not sustain MNZ into the future, the statement said.

Changes would be needed in revenue or activities, or both, if the organisation was to continue to meet its responsibilities effectively.