Sask Water's SPUDCO unit is being transferred to Crown Investments Corporation of Saskatchewan (CIC). It will operate as a new company, with a new name, as a wholly owned subsidiary of CIC's investment subsidiary, CIC Industrial Interests Inc.

"This transfer will allow government to sustain and protect our investment in the potato industry, it will enable us to build on the foundation established by Sask Water and help our potato industry grow and it will allow Sask Water to focus on its core responsibilities," CIC Minister John Nilson said.

Sask Water lost $9.7 million in 1999, according to the corporation's annual report tabled today in the Legislative Assembly. SPUDCO lost $3.7 million, mainly due to low commodity prices for potatoes. The bankruptcy of one of SPUDCO's customers, Lake Diefenbaker Potato Corporation, resulted in the loss of $3.5 million. There was an additional $1.7 million reduction in the expected value of the assets recovered through the bankruptcy. Sask Water also lost $820,000 on its core utility and non-utility business.

"The past few years have been difficult but government firmly believes in the long term potential for the potato industry in Saskatchewan and we will continue to support its development," Sask Water Minister Maynard Sonntag said. "Potato prices have increased by as much as 30 per cent for some types already this year and we are optimistic that this will be a good year for our growers. It is very important that the potato industry continue to grow to support the province's irrigation system and diversification of our agricultural base."

All of Sask Water's assets relating to potato production, storage and marketing will be transferred to CIC, along with contractual commitments, networking capital balances, mortgages and short-term debt. All contracts with producers will be honoured and transferred to the new company.

The company, which has not yet been named, will have a board of directors and be operated by nine staff currently employed by SPUDCO. The company's headquarters will be in Moose Jaw, with a field office in Outlook.

The process of transferring SPUDCO to CIC has begun. It should be completed by the end of June.

Karen Schmidt
A/Executive Director, Communications
Crown Investments Corporation
Regina
Phone: (306) 787-5889

Stephanie Choma
Sask Water Communications
Moose Jaw
Phone: (306) 694-3017