Prices soar for road sealing

Press, 27 October 1982, Page 26

Prices soar for road sealing

Road-sealing prices have risen to a level above what is considered to be a “fair and reasonable price." the Ministry of Works and Development resident engineer, Mr J. 0. Ballantyne, reported with "some distress" to a half-yearly meeting of the No. 13 District Roads Council at Cheviot.-

It would be fair to say that in many cases all tenders had been declined and the jobs readvertised on a different basis, said the District Commissioner of Works, Mr R. D. Grant, when asked to elaborate on the report after the meeting. It was a fact, however, that road sealing done on the West Coast was cheaper than in Canterbury.

Any further comment, however, was declined by Mr Grant.

In respect of the Canterbury and West Coast tenders, it is believed that, the bitumen in both cases is imported through Lyttelton. The road-sealing costs of Farrier-Waimak. Ltd, had rocketed recently because of

new requirements put on road-sealing equipment, such as sprayers, said the general manager,. Mr G. T. Evans, when asked to comment. He said that many hours were spent getting the bitumen sprayer up to certification last year. There was a lot of new technology to meet the specifications. ".We are right behind the Ministry, but it is costing a lot of money to do it,” said Mr Evans. Road taxes had an effect also. One of the main problems was that the road-sealing business was seasonal and the company had to carry specialised staff. The winter was a lost period. The company's balancesheets showed that it was not making exceptional profits, said Mr Evans. A loss of $75,000 was made for the year ended June, 1980. A small profit of $76,000 was made in 1981 and $77,000 this year. “It would be reluctant to comment as I do not know what the road-sealing prices are on the West Coast. We do

not tender for West Coast jobs because of the logistics.” said the general manager of Road Developments South Island, Ltd. It could be a case of the local contractor working to a closer margin.

The recalling of tenders had happened before in a genuine attempt by the Ministry to frame contracts that would attract the most favourable prices. The changes in plant requirements had been a factor affecting prices also and considerable changes had had to be made to meet the specifications introduced last season.

The facts were right and the reasons for them well known to the Ministry, said a spokesman for another company that did not wish to be associated with any public statement. Tenders were tenders and as such were discussed with the Tenders Board.

The manager of the only other of the four Christ-church-based road sealing companies was not available for comment.