Slicing the project pie

Press, 19 November 1982, Page 20

Slicing the project pie

Debate continues on who is getting what from one section of the work being generated by the large development projects. The Heavy Engineering Research Association has said that its members have had as little as 3.7 per cent of the off-site heavy engineering contracts on most of the projects begun so far. According to the association, the lion’s share of the work suitable for its members has been awarded to overseas contractors.

The Minister of Energy, Mr Birch, challenged the association’s figures and gave his own. For just three projects — the synthetic petrol plant at Motunui, the third pot-line at the Tiwai Point aluminium smelter, and the first stage of the New Zealand Steel expansion at Glenbrook — Mr Birch said that local contracts were worth slss': million, almost twice the association’s figure. Mr Birch’s figures were challenged, in turn, as including work not regarded by the -association as heavy engineering. An example cited was a $2O million contract,,let to an Auckland firm, for manufactured pipe for the Motunui plant. . None of this dispels the confusion and doubt that linger in the public’s mind about the value of the projects; on the contrary, the debate has served to intensify them. Few outside the industry would be able to define pipe manufacture as heavy or light engineering. The growth strategy was presented to the public partly as a means of inducing greater economic activity

through local manufacture and contracts. The Heavy Engineering Research Association believes that, in its own particular field, the reality has fallen short of the promise. If that is so, the Government, as the promoter of the projects and a partner in most of them, should explain why. Valid reasons may well exist, but they should be spelt out, in the interests of the Government as well as the public. If work that is being done abroad is work that could have been done efficiently and economically in New Zealand, the complainants must have good reason for complaint. If New Zealand factories could not produce the specified items in reasonable time and at reasonable cost, the public is entitled to wonder what the fuss is about. Being central in the planning of most of the projects, the Government should have the answers.

More important to the public is the fact that the present debate is only an indicator of local benefits from the projects, and apparently a poor indicator because of vagueness in definition. The public has an interest in the size of the spin-off to the local economy as a proportion of the total spending on the projects. This includes work on the sites as well as off, light engineering as well as heavy, and many other'subsidiary items that go to make up the whole; To date, the public’s knowledge has simply" been confused. r - ■