The Fiji government is setting up a shipping company with an annual budget of 800,000 US dollars a year.
The Fiji Times quotes the minister for transport, Josefa Vosanibola, as saying the company will not operate any ships but administer the government's shipping franchise scheme.
Under this scheme, the government pays commercial operators subsidies to provide services on uneconomic routes to the outer islands.
In the 1990s the Rabuka government stopped all state-owned shipping services in favour of subsidising services by commercial operators.
Leading Fiji shipping operator and former cabinet minister, Leo Smith, has described the setting up of the new company as stupidity for which taxpayers will have to pay.
Until now the subsidies were handled by the ministry of transport.