Mogal seeks new Waimairi contract

Press, 21 July 1982, Page 6

Mogal seeks new Waimairi contract

The Waimairi District Council will consider at its meeting this evening extending its contract with the Mogal Corporation to collect the district’s rubbish.

The contract is worth about $250,000 a year and has an escalation clause to counter cost increases.

The council's meeting comes almost a year after a nine-week dispute between the council and the Labourers’ Union and the Canterbury Drivers’ Union over the issue first of manning.levels, then of contracting out. When the dispute last year was settled after meetings between Mogal, the council, and a Federation of Labour executive member. Mr W. R. Cameron, part of the agreement was that Mogal would withdraw from its contract.

The council appointed a new contractor, D. Hack and Sons. In March this year Mogal took over the contract again. - “The Press’’- yesterday found that the rubbish-collec-tion business of Hack and Sons was already owned by Mogal when the agreement was made with the F.O.L. in August. Mr Hack said yesterday that Mogal- had bought his rubbish-collection assets in April last year.

Mr Hack said that his company was still in business in general cartage. He said that when he told “The

Press” last year that there was no connection between Mogal and D. Hack and Sons he was giving the correct situation because Mogal had already, in April bought the rubbish side of the business.

The South Island secretary of the Labourers’ Union, Mr W. B. Brown, said yesterday that the union had not known that Mogal had bought Hack’s rubbish business in April and in the light of the "public deception” the rubbish contract should be put to open tender and dealt with in a “proper manner.”

“Not only the unions but the ratepayers were misled,” he said. The chairman of the Waimairi District Council, Mr D. B. Rich, said that when Mogal took over the contract in March this year he assumed that Mogal had only recently bought Hack and Sons out.

However, he said he was not surprised by the true situation and denied that the council had had "the wool pulled over its eyes.” He said that the council had taken steps which needed to be taken last year and he was satisfied at the time, and now, that the council had done the right thing. Recently Mogal wrote to the council seeking an extension to its contract (for three years from July, 1981) to

July, 1987. so that it could partly write off its plant at the end of the contract.

Mr Rich said last year that the council should save $54,000 a year by using a private contractor. He said yesterday that he thought the expected amount would have been saved, though it was becoming more hypothetical to compare the new system with the old. The council was satisfied with the way the system worked. At a meeting of the council’s finance co-ordinating committee on July 7 the County Clerk, Mr J. Reid, expressed reservations about extending the contract to Mogal for another two years from July, 1985, because it would not enable the council to test the market as to price and contractors. The council had a responsibility to call tenders at reasonable intervals and not enter into longterm contracts with any one contractor. Cr Rich told the co-ordi-nating committee that it was important to have a reliable contractor and factors other than price carried weight. The continuity of the contract could be in the public interest, he said.

The contract contains an escalation clause which has been used by Mogal to offset its own cost increases. The original tender price of $16,417 a month has gone up to $18,669.