Blumsky's Niue contract 'cronyism'

17:00, Sep 20 2010

Foreign Affairs Minister Murray McCully has been accused of cronyism for giving former National MP Mark Blumsky a $78,500 aid contract for tourism development in Niue without putting it to tender.

Mr Blumsky, also a former Wellington mayor, was appointed high commissioner to Niue last week. In February, he began a six-month contract working with Niue's government on the use of a $4.5 million aid fund for tourism development on the island.

Labour MP Phil Twyford said yesterday he was not criticising Mr Blumsky's abilities or his appointment as high commissioner, but Mr McCully's decision to award the contract without tender "smacks of cronyism". It was standard practice to put such contracts out to tender, as had happened with several less lucrative contracts on the same Niue project.

"It's unorthodox for a minister to intervene in the awarding of a contract and to insist it is made without tender to one of his political cronies. This raises questions about the way Murray McCully is managing the aid programme.

"There are reasons why these contracts are tendered and it is precisely to avoid conflicts of interest and cronyism."

Mr McCully said Mr Blumsky was appointed because the original appointment – tourism consultant Trevor Hall – was not available to continue the work.

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Mr McCully selected Mr Blumsky from two names provided by his officials. "His appointment and that of Mr Hall was required because of the stalemate I inherited in the relationship."

Yesterday, Mr Blumsky said Mr McCully had approached him about the contract. He believed it was because he had the right skills for the job – as mayor he had worked hard to develop Wellington's tourism and he now had a company to foster start-up businesses.

"I know Phil Twyford is doing his job, but I think the things I've done are perfect for Niue's situation. I've had a diverse career and that is why Murray McCully chose me for the tourism development role and now [as high commissioner]."

He expected to start his two-year term in Niue in October. Although he had never visited Niue before this year he was now fond of it, describing it as "quite a diamond".

"Personally, the timing also suits my life stage perfectly. I'm able to move out without too much angst or disruption to anyone's lives."

Despite millions of dollars of aid money going into Niue over the past decades, there was little to show for it and both he and Niue's premier, Toke Talagi, believed it could be more self-reliant.

His goal was to increase air services between Auckland and Niue from the current weekly flight and to increase tourist numbers from 5000 to 10,000 a year within five years.