Road firm gives up contract to Railways

Press, 8 November 1978, Page 7

Road firm gives up contract to Railways

PA Auckland Pulp from the new Winstone Samsung Industries, Ltd, Karioi pulp mill will be carried by rail to Napier instead of by road. Freightways Express. Ltd, which won the contract in a public tender competition, has withdrawn from it in favour of the Railways. A statement issued by the managing director of Winstone (Mr B. D. Bamfield) with which the managing director of Freightways (Mr R. H. Pettigrew) concurred, said that agreement had been reached to provide that, if at any time during the cartage contract the Railways were not able to lift and transport the pulp to Napier, Freightways would be the preferred road transport carrier. Mr Bamfield said that although no present legal barrier prevented Freightways from carrying out the agreement made with Freightways considered it advisable to withdraw.

Winstone Samsung had accepted this decision, knowing Freightways believed impediments beyond its control could arise and thus adversly affect the industry and significant

overseas export earnings vital to the economy.

Consequently, as the result of Freightways’ decision, Winstone Samsung had reached agreement with the Railways to transport the entire pulp output for a five-year term.

The agreement was signed after the Railways revised its freight charges and Winstone Samsung reconsidered the ’’transport element.” One concession the Railways is making is giving the company a private siding at the mill. This would take some time to build. Until then, there was an interim arrangement to road pulp to a private siding owned by M.S.D. Speirs, Ltd, for loading on rail.

At the Napier end, the pulp would be unloaded on the wharf. With the Railways doing the job the pulp will have to be carried about 275 km from mill to Napier via Palmerston North.

Mr Pettigrew said his firm had in mind taking the product to Taihape then across to Napier, about 150 km. The benefit of the shorter distance by road has

been said to be offset by necessary road upgrading and higher maintenance costs, although none of the parties mentioned this point.

The first regular shipment to South Korea is set for January, and this, as with completion and running in of the mill, will be ahead of schedule. Originally the mill, begun in February. 1977, was not expected to be finished and in use before the first quarter of next year

The mill is a S3OM investment. one of the largest of its kind in New Zealand this decade, and the development has been carried out against the economic tide.

Winstone Sumsung is a Joint enterprise of Winstone, Ltd. and Chonju Paper Manufacturing Company, Ltd, of South Korea. Mr Bamfield said negotiations were taking place to sell the 30 per cent of the initial 85.000-tonne output not committed Chonju paper.