N.Z. contracts too costly?

Press, 30 May 1983, Page 5

N.Z. contracts too costly?

PA New Plymouth The synthetic fuels plant at Motunui could have cost up to $2.1 billion if all the • engineering work had been given to New Zealand firms, ’ the Minister of National Development, Mr Birch, has said. He told a forum on gasprocessing development in New Plymouth that the Government had intervened in the letting of contracts to

ensure that New Zealand firms got a fair share of work on the project. In some cases this had added up to 50 per cent more to the cost of a contract, he said. However, if the Government had insisted on a 100 per cent New Zealand content, the cost of the project would have been $2.1 billion and not $1.4 billion. “We would not have had a project,” he said.

Mr Birch was responding to comments made by the general manager of Newcan Engineering, Mr Andrew Gyde, that there was a severe underestimate of New Zealand’s ability to cope with the engineering requirements of the Motunui project. He said the country’s workshops were quite capable of doing the fabrication work necessary, and he wondered whether they

would get a larger percentage of work in the next round of projects, if they went ahead. Mr Birch replied that a big projects advisory group had been established by the Government, and the engineering industry had its own representative on this body. He said the group’s sole object was to increase New Zealand content in big projects.