ARAPUNI WORKS.

Press, Volume LX, Issue 18152, 15 August 1924, Page 10

ARAPUNI WORKS.

THE SWEDISH CONTRACT. BRITISH AGENTS' PROTEST. deputation to ministers. (special-to "the press.") "WELLINGTON, August 14. There were plain words and a very heated atmosphere at times during the course of a deputation of British manufacturers' agents to the Prime Minister to-day to protest against portion of the contract for machinery and equipment for the Arapuni powerhouse and hecdworks being carried out by a Swedish firm. Mr G. H. Scott, president of the British Manufacturers' Association, was the spokesman of the deputation of five.

"This is the most serious thing that lias ever,happened to -British industry," said Mr Scott, in introducing his subject. "The result in New Zealand to the British manufacturer will be loss of prestige, and the general effect is going to be more serious than anybody can see'at present. As to the result in England—well, it is very hard to say how far-reaching it will be.

"We are not concerned because some of our members are affected. The tenderers are members of the Association, and of the Federated British Industries. The successful tenderer, Messrs Armstrong, Whitworth and Co., is one of our members. We wish to make it clear that we are dealing with the principles involved, and the departure of the Government from its settled policy in the past." Mr Massey: I waint you to prove that. It is a very serious statement to make.

Mr Scott: If you are going to let it to foreign people that will be so. Mr Massey: How do you make that out? Mr Scott: Included in the successful tender is a Swedish contract for a large proportion of the machinery. Mr Massey: The successful tenderer is Messrs Armstrong, Whitworth, and Co., a reputable English firm. Mr Scott: That is a splendid smokescreen.

Mr Massey (very warmly): You will please understand that there is no smoke-screen about our doings. We don't adopt tactics such as you suggest. We are quite in the open. Mr Scott: I am speaking perhaps with feeling. We know what the position is. I want to point out quite clearly that the fact of the Government accepting a tender that largely includes foreign manufacture, when it could have accepted one of entirely British manufacture, reflects to some extent on the Government's declared policy in the past. We have now some important information before us. The Government, after opening the tenders, finds one which includes foreign manufacture to the extent of £ 300,000. That was the Minister's statement to the Press.

Hon. J. G. Coates: Not foreign material. . Mr Scott: Material that is involved in two contracts, No. 1 and No. 2.

.Mr Coates: I made no such statement, because I know it is! wrong. Mr Scott: I think.steps have been takeii since ■ to have machinery -made in Great Britain to the value of £236,000. Mr Coates: No; you are all at sea.. Mr Scott: Tou made that statement to me, and your statement is definite: That all except £64,000 is to lie of British manufacture. Mr Coates: That is quite. correct. Mr Massey: Let us stand on that." That is definite. Mr Scott "Entirely Wrong." Mr Scott: The tenders received, by the' Government included tenders from three of our members. Two of them were for £604,000 for No. 2; another was for £640,000. They were entirely British. Included in Armstrong, Whitworth'a tender was one for just under £600,000 for No. 2, in which, was included the plant and machinery to be supplied by the Swedish Electric Coy. Mr Massey:'You had better stick to one point; not the offers made to us, but the offer we have accepted. Tou have it now down to the fact, which is admitted by the Minister, that the foreign manufacture is £64,000, and that all thd rest is British. Mr Scott: I am trying to make this statement: that since opening the tenders — Mr Masscy: Is there any such discovery! Mr Coates: The attitude of Mr Scott is wrong in its entirety. When the tenders were opened our first concern was how much of the plant' would' be British made, and how much foreign. We considered that foreign plant was no use to the British workmen. We asked the tenderers to state where the plant was to be manufactured, arid to specify any portions that would be .of foreign manufacture. In the tender was provision, as I have said, for £64,000 worth from the Swedish Electric Coy. Mr Scott is trying to mako the point that we did wrong in ascertaining where the plant waa to bo made.

Mr Massey* We need not consider that. We are responsible to the people of New Zealand. Mr Coates: Exactly.. Mr Scott:' The responsibility, is that after the Government opened the tenders they arranged with Armstrong, Whitworth arid Coy. that the value of foreign work in their, tender would be £64,000. Mr Coates: That is wrong. Why do yon keep on saying that? Mr Scott: Supposing I decrease the figures? The Minister: You need not do that. "Why continue to make misleading statements? Why mislead-the public? Mr Scott: Let us leave the figures out. .

The Minister: Borc't leave anything out. The Government asked the ccrntractors, as I have said— Mr Seott: After opening the tenders. Mr Massey: How could they know until they had opened them? Mr Scott: But it included machinery made by a Swedish firm, and it was going to be made there until it was decided — Mr Coates: How do you know that? The tender did not. say that. Mr Scott: We claim that the other tenderers should have been approached at the same time for the purpose of allowing them to quote for foreign material. The Government has hopes to bring this loan under the terms of the British Trade Facilities Act. That is a matter for the Government, but we, as citizens, are interested in this matter. We are interested because the funds of the Trade Facilities Act are very largely supplied by taxation from British manufacturers, members of "out Association. We consider that it is utterly wrong for any taxation of our manufacturers at Home to be used in the manner suggested. We claim that it is

creating competition - that is not fair. In dealing with this matter, the Minister stated that he wonld. not giy® * preference of 20 per cent, to British manufacturers. "When aaked if he was giving 10 per cent, he still said no. I want to remind him The Minister: Fortunately, I have gt>t a copy of what I said. That is not the case. Mr Scott: Some of the members of the deputation are here. The Minister: I can't help that. The statement is not correct. Mr Scott: Please tell me where I am wrong. The Minister (consulting the shorthand report of the deputation) :■ I did not say we would not give 10 per cent. Mr *Scott: Did you refuse 20 per cent. ? The Minister: Yes, under the Customs Act. Mr Massey (to Mr Scott): You came here to see me this morning. Go ahead. Mr Scott: There was a refusal on the part of the Public Works Department.

A British Tender. Another matter we cannot get any indication of is whether there is _ any means of deciding whether British plant will be included in the accepted tender. We say it can be arranged. We claim that the plant to be used by the successful tenderer is within £IO,OOO of the tender of one of our members for British manufacture. We were told that the British plant com.plicd with the specifications of the Government, and that the Government S specifications included such items as a provision that tho plant would completely use up the water-power available in the pipe-line. That British plant would have done. Mr Coates: That is not correct. Mr Scott: Another point is that Mr Coates has told us that the extra value of efficiency in the Swedish plant, combined with some difference in tho price, ■was what led to a recommendation that the plant should be used. We say that if the British plant was going to fulfil all the requirements and specifications it should have been used. Manga - hao is entirely British. There _is £82,500 involved in the Trade Facilities Act. Mr Massey: Will you guarantee that we will get that money? Mr Scott: And use foreign plantT Mr Massey (very warmly): Keep to the point. Not a copper of the money loaned by the British Government will go into foreign plant or workmanship, and you know it. Mr Scott: I don't know it, but the Trade Facilities Act will not allow the money to be used for foreign plant. Mr Massey: That is exactly what I have said. Mr Scott: We feel that, even supposing the contract is carried on as suggested, inspection should be arranged for in England, and certificates of origin secured. , . Mr Coates: We have arranged that the invoices must be submitted to the High Commissioner for New Zealand and approved by him. ' Mr Scott: That is not technical inspection. There are two bodies that function at Home to safeguard us and the Government: the organisation known as "Beaver," and the Federated British Industries. Both will certify technically to the origin of plant the Government gets. .In regard to our position here, we feel that if-the matter has not gone too far, it might be looked into by a sub-committee. Mr Massey: You mean a sub-commit-tee of the Cabinet? Mr Scott: So long aa it was not directly interested.

Prime ■ Minister's Beply. Mr Massey, after inviting other members of the deputation to speak, said that the matter had been put very, well by Mr Scott, though he had had occasion to, pull him up, for matters that were irrelevant.: . • . . - "The position is plain.," said the Prime Minister. ' "The whole country knows,. and all the British manufacturers. know, tliat we are out to give them every possible assistance so far as their workshops - are concerned. I have said so time and again, in England and here, and we have done it. Nobody would have been more pleased than the Government, or myself, if it had been possible to make certain that every shilling of . the contract was to be spent in British workshops. We found that there was some difficulty with regard to machines and parts of machines of which the Swedish Electric Company have been making a specialty. We have our advisers—l am speaking of the Minister and officers of the Public Works Department, who, I believe, ate thoroughly conscientious men, without bias for foreign manufactures. We have not forgotten what happened' during the war. Sweden, while not being antagonistic, showed that if there was a preference it was against the Allies.

Foreign Work Cut Down. Matters such as this, are generally dealt with by a sub-committee of the Cabinet. They went into the matter exhaustively, and came back with a report that Armstrong, Whitworth and Co. were the lowest tenderers. There was the difficulty about the proportion of Swedish manufactures which they intended to use. After a certain amount of discussion between the Cabinet and the sub-committee, of which Mr Coates was a member, it was decided that the advisers of the Public Works Department, who had communicated with the tenderers, could have ttie original proposals in regard to foreign manufacture cut down in a very material degree. Mr Coates: From £IOO,OOO to £64,000. Mr Massey: Yes, it is only a comparatively small proportion of the amount of the tender., It was expected that machinery to the value of £440,000 would be required, he said, and for the reasons mentioned it seem-, ed impossible to get less of foreign manufacture than through Armstrong, Whitworth and Co. Mr Coates: It would have meant calling, for fresh tenders. Mr Massey: That would have meant a very serious delay in the contract.

Grievance • Against Manufacturers. "I want to say a word or two about how we have been treated by British manufacturers," said Mr Massey. "We have a grievance ' against them. We have documentary evidence in our possession- that certain British manufacturers have been using the depreciated currency of European countries in getting work done there,.and only a sufficient proportion of it in Britain to enable "them to secure'the preferential rate for British workmanship. That

can be proved. They are not playing 'the game.". , Mr Scott: It is rotten. We agree with you. Mr Massey (Bmiling): I am glad yoti agree with mo. It would have pleased us very much if the £64,000 could have been expended on British workmanship rather than Swedish. We have always realised that we could not do better than have British manufactures.Mr Coates: We have an instance of the satisfaction of British manufacture in the Otira tunnel, which was a firstclass job. I have never been optimistic about the assistance we were likely to obtain from the money set apart under the British Act," iaid. -Mr Massey. "It has been stated unofficially that the amount of the loan will not exceed £5.000.000 for the wiole Empire. We thoaeht wa would get and KTjT visions of the Act had been intended to «ti^ e V U w W \ Would have been enwnrlf. 1 ! aTe other important works besides Arajjtmi. We have re-

ceived no answer to our application .to the "British Government. I don't know why." Preferences to Britain. Mr Massey went through the tariff, item by item, to show the deputation the extent of the preference granted by the New Zealand Government on machinery and equipment of the type that would be utilised in the Arapuni contract. There was a preference of 10 per cent, in favour of British -against foreign manufactures on electrical appliances, generators, transformers, cable gear, annunciators, indicators, winches, and turbines, and turbines of over 200 brake-horse-poWer were admitted free, against a 10 per cent, duty charged oh foreign makes. "That is ! the New Zealand law and the principle we work on," said the Prime • Minister. "So far as Government contracts.are. concerned we have always stretched it. in favour of British manufacturers. We have extended them every possible advantage. We give preference on 425 articles in the tariff, and, we are not going back. On the contrary, the Government is strongly in favour of increasing from 25 per cent, the proportion of British manufacture necessary to gain the preferential duty, to ensure that more British machinery and workmanship are utilised. I'have"learned that it will not require legislation, but that it may be done by Order-in-Council, and I hope to be able to give effect to it during the next few, weeks.

"We have kept nothing back," concluded Mr Massey. "It is not a matter of taking you into our confluence, because it is a matter that the public should know, and does know. We regret that it has been necessary to place the order with a Swedish firm, not directly through us, but through the contractor indirectly. lam afraid, however, there is no hope for it now £oing back;"