ROXBURGH CONTRACT REARRANGED

Press, Volume XC, Issue 27340, 4 May 1954, Page 10

ROXBURGH CONTRACT REARRANGED

Contractors To Pay State £200,000 For Delays

NEW ZEALANDER TO HAVE CONTROL (From Our Own Reporter) WELLINGTON, Ma/ 3. The payment of £200,000 compensation to the Government by the existing contractors for the Roxburgh hydro-electric scheme, complete reorganisation of the scheme and the placing of it under the control of a New Zealand contractor have been approved. In a statement issued this evening, the Minister of Works (Mr W. S. Goosman) said that Mr Arnold Downer, one of New Zealand’s best known contractors', had been appointed to take charge of the operation, and possibly the American firm of Morrison-Knudsen, Ltd., contractors, with Downer and Company, Ltd., for the Rimutaka tunnel, would participate. The compensation was being paid for past delays the Minister said. The present contractors, Holland, Hannan and Cubitts, of London, and Conrad Zschokke, Switzerland, would continue on the job. Under the new arrangement, the old target estimate contract was being cancelled and replaced by a straight-out contract. The new contract price was an estimate made by the Ministry of Works of the cost of completing the job, and would operate from May 15.

Mr Goosman stated that for some, time the Government had been concerned at the lack of progress at Roxburgh. The position was sufficiently I serious for the Government to request the directors of the contracting companies to come to New Zealand for discussions. Mr E. R. Hole, representing Messrs Holland and Hannan and Cubitts, and Mr Necker, representing Zschokke, had now been in New Zealand for some six weeks, and had spent a considerable time on the job at Roxburgh. The contractors, Mr Goosman said, had frankly admitted that they had under-estimated the difficulties a* opening up work in this country and the difficulties attendant on taking over a job that had already been well started. For this, they had ottered to reimburse the Government up to date to the extent of £200,000. In addition, to gain the benefit of local knowledge and experience, they had arranged for the firm of Downer and Company, Ltd., to join them in the contract. This firm, in association with Mor-rison-Knudsen, Ltd., recently carried through the Rimutaka tunnel con trad and the Waitaki hydro-electric extension works well ahead of scheduled time. Mr Downer is now discussing with his American associates the possibility of their taking an interest in the Roxburgh job. After considering several possible alternatives the Government, Mr Goosman said, had decided to. accept th? contractors’ offer. In doing this, a realistic view of the whole position had been taken. River Diversion

If rive. • conditions permitted, it was vital that the river should be diverted during the coming winter, and of all the alternatives that chosen interfered least with arrangements already made by the contractors. Mr Goosman added that it should

be said on behalf of the contractors that the Works Department before the commencement of the contract had been unable to complete a vital portion of the work—the spillway channel. The contractors had to undertake this on arrival in New Zealand Furthermore, the opening up of excavations on the right bank of the river had revealed unstable country and required a large quantity of overburden to be shifted before work on the intake channel and spillway could be completed, -j The present contract was entered into at a time when international conditions were very much disturbed, and when there was uncertainty about the availability of manpower and materials. It was at the time the most suitable fox-m of contract for the conditions existing, but in it the contractors’ liability was limited to a loss of bonuses apd fees. The 'contractorF:’ better acquaintance with New Zealand conditions and their association with Downer and Company made it possible now to arrange a contract or a firmer basis, and as from the middle of next month the contract would be on the schedule of rates basis, in value not to exceed the estimate of the Ministry of Works submitted to the Government before tenders closed. This estimate, Mr Goosman said, had now been increased because of the increase in labour and material prices in the last two years and also because of the extra work which had been found necessary, and which included work which the department itself had found it was unable to complete. Mr Goosman concluded by expressing appreciation of the co-operation the Government had had from the contractors during the recent negotiations. Mr Downer, he said, had completed successfully for the Government many difficult contracts over a long period, and this experience, the Minister felt, would be of the greatest vdlue to the contractors at Roxburgh.