M.P. seeks details on local content of energy projects

Press, 10 November 1983, Page 2

M.P. seeks details on local content of energy projects

Parliamentary reporter An accusation that the Government is using scarce overseas funds to employ Japanese and other engineering workers, instead of employing New Zealanders, has been made by Mr M. K. Moore (Lab., Papanui). He had asked the Minister of Trade and Industry, Mr Templeton, a series of questions in Parliament on the main energy-based development projects.

Mr Templeton was unable to say what percentage of the engineering work had gone to South bland firms.

Mr Moore asked what percentage of the engineering work in these projects had gone to overseas companies, New Zealand companies,. South Island companies, what the projects were, how much money was involved in each, and how many jobs had been created. He also asked what new contracts the engineering industry could expect in the next 18 months, and if the Government had a policy to give the work in those projects to New Zealand firms. Seven projects were listed by Mr Templeton: • Marsden Point refinery expansion: $1650 million capital cost, S4B6M awarded to New Zealand firms, final estimated New Zealand content 48 per cent, 2300 manpower peak on-site construction, 200 peak when operational. • Motunui synthetic gasoline: $1475 million capital cost, $347M awarded to New Zealand firms, final, estimated New Zealand content 53 per cent, 1800 manpower peak on-site construction, 300 peak when operational.

• Chemical methanol: $2lO million capital cost, SBOM awarded to New Zealand firms, final estimated New Zealand content 38 per cent, 650 manpower peak

on-site construction, 80 peak when operational.

• Ammonia urea: $ll2 million capital cost, S39M awarded top New Zealand firms, final estimated New Zealand content 35 per cent, 290 manpower peak on-site construction, 100 peak when operational. • New Zealand Steel development: $557 million (in 1981 terms) capital cost, $334M estimated awarded to New Zealand firms, final estimated New Zealand content 60 per cent, 1450 manpower peak on-site construction, 600 peak when operational. • Tiwai Point third potline: $2lO million capital cost, SISOM awarded to New Zealand firms, final estimated New Zealand content 70 per cent, 540 manpower peak on-site construction, 380 peak when operational. • Clyde dam: $579 million capita! cost, SI2OM awarded to New Zealand firms, final estimated New Zealand content 76 per cent (so far), 1200 manpower peak on-site construction, 40 peak when operational. None of these figures refers to off-site work or manpower, or what percentage of that is being done in New Zealand.'

But because nearly all the on-site work naturally, is done in New Zealand, the figures for off-site work would be far below the median for the New Zealand content of each project.. Mr Templeton also gave the details for seven projects for which engineering work was still in prospect: • Railways Main Trunk electrification: $165 million capital cost, starting definite, peak construction and operational manpower undetermined. • New Zealand Steel, stage H: $483 million capital cost, starting 1984, peak construction and operational manpower undetermined. • McKee Oilfield de-

velopment: $45 million (spent) capital cost, definite, 70 manpower peak on-site construction, four when operational. • Gas Liquids second stage: undetermined capital cost, proposal decision in 1984, 1650 manpower peak on-site construction, operational peak undetermined. • Kinleith pulp-mill modernisation: $152 million capital cost, starting ip 1984, 280 manpower peak on-site construction, operational peak undetermined. • Ohaaki geothermal: $230 million capital cost, starting this year, 360 manpower peak on-site construction, 70 peak when operational.

• Other electricity generation: $4254 million capital cost, starting any time 1985-98, 5000 estimated manpower peak on-site construction, 500 estimated peak when operational. Mr Templeton said this list of future projects was not exhaustive, but it did show there was considerable work for the New Zealand engineering industry to come, he said. Mr Moore said these answers were not satisfactory. More than half of the Government’s tenders were going overseas.

“This is using our scarce overseas funds to employ people in Japan and elsewhere,” he said. “Japanese companies get subsidies by way of cheap loans that are denied local enterprise. “There is a system of dumping, or marginal costing at least, in action now. “New Zealand seems to be the only country that is fool enough to stick to the rules of so-called fair international competition,” Mr Moore said.

New Zealand money should be spent on New Zealand jobs in New Zealand companies, and the Government should be actively supporting that.