Government axes controversial Saudi sheep deal, saving taxpayers $1m

The Government has pulled the plug on the final stage of the controversial Saudi sheep deal, saving taxpayers $1 million. 

It has cancelled the contract to deliver a Saudi businessman, Hmood Al Khalaf, an abattoir, saying the New Zealand public will not be giving him another cent. 

The $2.5 million kitset abattoir, paid for by taxpayers, is now sitting in a shipping container in Hawke's Bay. 

"We're not spending any more money on its installation or delivery," Trade Minister David Parker told 1 NEWS.

"We have managed to bring it to an end, saving the last million dollars or so. But I'm afraid the other 10 million dollars that has already been spent has been flushed down the drain by the prior government. They should hang their heads with shame," Mr Parker said.  

In what was coined the Saudi sheep scandal, the former National government built Hmmod Al Khalaf an agrihub in the Saudi desert. 

It gave him $10 million in cash, livestock and agricultural equipment, hoping it would lead to a Free Trade Agreement with the Gulf States. 

It didn't. 

The Greens co-leader James Shaw says he's glad the Government has finally put a stop to it. 

"There was nothing about this that was good - it was dodgy from beginning to end," Mr Shaw said.  

"National's claim was always completely spurious that this deal would somehow secure a trade deal with the Gulf States - it clearly didn't."  

It all began when New Zealand stopped live sheep exports in 2003. 

It followed an animal welfare debacle aboard the Cormo Express - owned by Hmood Al Khalaf. 

The livestock importer was annoyed over the ban, and felt both National and Labour governments misled him about live exports resuming. 

However, in a statement, National's trade spokesperson Todd McClay said National was simply "dealing with a range of difficult diplomatic issues created by the previous Labour Government".

"The fact is this Government is neglecting our trading relationships and New Zealand exporters will see this as a missed opportunity - the Government needs to assure Gulf Cooperation Council countries that we remain committed to progressing an FTA once the current impasse with Qatar is resolved."

In 2016, an investigation by the Auditor-General cleared the Government and officials of corruption but criticised National for a lack of transparency.

The agrihub in the Saudi desert was intended to showcase the very best of New Zealand agriculture but it appears now we have nothing to do with it.

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    The previous National government gave Hmood Al Khalaf $10 million in cash, livestock and agricultural equipment. Source: 1 NEWS