ROXBURGH HYDRO CONTRACT

Press, Volume XC, Issue 27404, 17 July 1954, Page 6

ROXBURGH HYDRO CONTRACT

Mr Holland Defends Negotiations OPPOSITION CALL FOR INQUIRY (New Zealand Press Association) WELLINGTON, July 16. The Government’s handling of the contract negotiations for the Roxburgh hydro-electric scheme was defended in the House of Representatives today by the Prime Minister (Mr Holland). He replied to Opposition criticism, and a suggestion by Mr M. Moohan (Opposition, Petone) that a Royal commission should investigate what he called the “Roxburgh scandal.” Mr Holland said Parliament was the highest Court in the land, and was in effect holding a Royal commission of inquiry. The Opposition’s main charge was that the Government had not followed the advice of its own engineers. Would the Opposition say that the charge against the Government fell to the ground if he was able to prove that every single step in regard to the Roxburgh contract was on the advice of those engineers? The £200,000 paid back to the Government by the original Roxburgh contractors was the Works Department engineers’ estimate of what the Government should receive because of delays, said Mr Holland. The Government had expected to “have the wheels turning” a year earlier than the department’s estimate, and to save £1,500,000. The worst that could be said, therefore, was that the hopes of saving £1.500,000 and a year in time had not been realised, but the job would be done within the department’s estimates of cost and time. “Not a Breath of Scandal”

Work on the Roxburgh job was first class in every respect, said Mr Holland. There was not a breath of scandal in the whole affair. The Government regarded the rearrangement of the contract as a first-class piece of business. The rearranged contract was pegged to the department’s estimate. Mr Holland said that £5.000,000 of the original contract had been spent up to the time the troubles began, and a new contract was arranged on a schedule-of-rates basis for £10,120,000, including £600,000 for the spillway work, which it had been decided to give -the contractors because the work could not be done by the Government. The new contract also included £120,000 for plant and £BOO.OOO for increases in wages, and totalled about £1,500,000 more than the original contract price, Mr Holland said. By the time other work had been done and generators and equipment installed, and allowances made for lake control, the total cost of the Roxburgh scheme would be £24.500,000, which was the departmental estimate. The contractors would get 4 per cent, of their contract price, said Mr Holland. They had not received a single penny out of the £5,000,000 already spent on the work, and they had paid all administration costs involved in that sum. They had lost bonuses because of inefficiency, and had forfeited all rights to making claims by law. The job itself was a first-class one in every respect, and the engineers had signed certificates to that effect. Recourse to Private Firms When the House resumed its debate on Roxburgh today, Mr T. L. Hayman (Government, Oamaru) said that, had the Government accepted any but the lowest tender for the scheme, it would have been condemned by the country. If the Labour Government had remained in power, it would have had to put the same Roxburgh contract into the hands of private contractors because of the scarcity of experienced engineers and skilled men in the country at that time. Mr A. McLagan (Opposition, Riccarton) said Government speakers were desperately attempting to place the responsibility for the “Roxburgh mess” on the departmental engineers. If the engineers had been allowed to determine over-all policy for the job, the present position would not have arisen. The engineers would never have given a contract to “these incompetent firms.” The debate will be continued on Tuesday, when it is expected that the Minister of Works (Mr W. S. Goosman) will speak. Since the debate began last evening, six Government and six Opposition members have spoken.