Land base operations will be initially setup on both Rennell/Bellona and Honiara. Office based staffing will need to be identified prior to the arrival of the ship and to begin the process of securing slot charter arrangements and undertake market research to identify sectors where potential for operations may exist.

　

　

This structure is extremely simple and allows for future expansion. It also anticipates an emphasis on cross functional training and allows for possibility of job rotation in recognition of the fact that the Company is small and will place a great reliance on individual members of the team.

　

The selection of suitably qualified individuals for both land and sea operations will be an important driver of costs particularly in the long term and not enough emphasis can be placed on the importance of the "correct choice". The process of this is outside the scope of this discussion paper however it is recommended that a committee is formed specifically to deal with staffing and remuneration packages.

　

It is important to note the value of the management team will affect the rates of insurance, risk profile and assessment of financiers when seeking credit facilities (a prospect for the future but also outside the scope of this paper) and the effect of proper management decisions which will have an immediate impact on cash flow and overall financial performance.

　

　

As discussed under industry issues the type of vessel is critical to the ability of the Company to meet its objectives and still remain a going concern. This portion of the report draws from meetings with relevant experts in the industry who identified the type of vessel suitable for our needs. The vessel recommended² would require a minimum of ten crew members when fully operational. A typical staffing structure is as follows:

　

　

All staff will be locals and a listing follows of key positions with possible candidates who have been identified as potentially available for hire.

　

For the post of Captain:

　

Holders of Master Pacific:

　

　

Holder of Foreign Going Ticket:

　

　

For the post of Chief Engineer:

　

　

These critical posts are also required to be filled for the transport of the vessel from overseas port to Honiara. The bare minimum crew for this will be five with an additional Captain, 2^nd Engineer and deckhand who need to be identified and appropriate approach made prior to finalising the purchase of the vessel. The degree of experience and qualification of the key posts is dependant on the actual vessel and its engine size/strength/type.

　

　

Avaiki Shipping Company Limited is incorporated with shares being allotted on trust to the Provincial Development Authority. The tax consequences of this structure is an exemption of taxes as a result of the involvement of the Provincial Government however it is the recommendation of this paper to formally seek a tax exemption certificate from Inland Revenue.

　

Further investigation as to the extent of this exemption also needs to be undertaken.

　

The Company structure offers an appropriate structure for raising capital through external sources once the Company has the assets provided by the initial development grant from the National Government. Recent papers from STABEX and EEC suggest that a review of the shareholding may become necessary to access aid back funding in the near future however at the date of this paper no formal requirement was noted or mentioned by the respective government authorities.

　

Being a newly formed Company we have the opportunity of being able to create our corporate identity. A conservative amount has been budgeted for to allow for corporate letterheads and signage to be put in place. The corporate colours are recommended to mirror the Provincial flag (which is yet to be decided and may be preempted by this exercise).

　

The existence of these on the stationary and accounting documents will also deter fraudulent behavior and aid in the earlier detection of such.

　

　

The Company will utilise computers to ensure modern decision support systems are put in place. The system will be initially a combination of both manual and computerised processes allowing an easy audit trial and quicker compilation of accounts. It is recommended that a monthly reporting deadline be put in place in which the prior months performance is assessed and any corrective action can be quickly put in place. Account structure and detail of information will also need to be determined by the Board and incorporated into senior management performance based remuneration package. A Finance Sub-Committee which consists of board members and other invited experts will be responsible for overseeing the financial performance of the Company

　

Communications will be via radio wireless, email, faxes and local phonecalls only. This ensures we are utilising the most cost effective means of communicating.

　

The shipping technology requirements will be specifically identified during the selection of the ship but certainly the minimum equipment as required by International and Solomon Islands Maritime laws will be included in the purchase. Discussions with experts suggest that the most appropriate vessel will be from Japan³. The Japanese used shipping fleet is more likely to be of a higher quality then other country's ship traders (eg: Korea), as Japan is more up to date with their maintenance requirements and they utilise the latest technological advances to ensure the best quality control in ship maintenance.

　

Apart from the potential for growth it should also be possible to cut costs by working more closely with our Province and examine potential to share common costs. This rational recognises that shipping will be critical in the future development of Rennell/Bellona which will in turn lead to prospects of increased revenue collections by the Provincial Government.

　

Other potential areas of cost control include:

　

The most critical driver of overheads in the sea operations is the choice of vessel and its suitability for our market. Comments made by Mr Naniseni Basiara suggest that a vessel similar to the size of MV Isabella will be the most appropriate and it is on this recommendation that the vessel will be identified, valued and finally purchased.