The Western Australian Coastal Shipping Commission will cease operations.
Premier Richard Court announced today the Government was left with no alternative but to close Stateships, dispose of all its assets and orderly manage its substantial liabilities.
"The Government is very mindful of the important service Stateships has provided to the development of this State, especially the North-West," Mr Court said.
"However, Stateships has cost WA taxpayers more than $160 million in direct subsidies during the past 10 years and is currently running at a loss of $19 million a year - a staggering $50,000 a day."
Mr Court said the Government's attempt to reduce Stateships' stevedoring costs by $500,000 a year had been stymied by the maritime unions at every turn.
"The Maritime Union of Australia, which undoubtedly has incredible industrial and political muscle, has pushed the Government to the point where the only responsible action is to cease Stateships' operations," he said.
Mr Court said the financial lease arrangement the Labor Government had entered into with the three Stateships - the MV Roberta Jull, MV Gordon Reid and MV Frank Konecny - was outrageous and had cost Western Australian taxpayers dearly.
The architects of WA Inc had demonstrated the same amateurish economic reasoning when they burdened the entire WA community with these unnecessary and extravagant financing arrangements.
"In fact, Labor committed this Government to pay about $7 million a year for 10 years to lease these ships when each ship has a market value today of possibly less than $7 million," Mr Court said.
"To date the lease has cost the Government more than $27 million."
The Government had started assessing alternative transport arrangements for rural and remote communities in the North-West served by Stateships. No-one would be disadvantaged.
Civic and community leaders in port towns and other centres would be fully consulted on the different options available.
Employees of the WA Coastal Shipping Commission would be offered a range of employment options in line with the provisions of the Public Sector Management Act including redeployment within Government and redundancy packages.