THE PRESS FRIDAY, FEBRUARY 3, 1984. Progress at Marsden Point

Press, 3 February 1984, Page 16

THE PRESS FRIDAY, FEBRUARY 3, 1984. Progress at Marsden Point

A little more than 12 months ago, all work at the site of the Marsden Point refinery expansion was at a standstill; the work-force had downed tools in protest at the employment of 12 British riggers, the first “foreign” labour engaged on the task outside administrative and technical staff. The New Zealand workers objected to the hiring of staff from overseas — and the manner in which the hiring had been done — while New Zealanders were without jobs. At present, representatives of the contractors and of the Auckland Boilermakers’ Union are working together in Australia to find up to 100 skilled boilermakers to bring to New Zealand to work at Marsden Point. This joint effort, more than the erection of flare stacks and reactors on the site, marks the real progress that has been made at Marsden Point. To say that the refinery expansion has had a troubled history is rather like saying it was wet in Southland last week. In both instances, the understatement so belittles the reality as to verge on misrepresentation. In the first two years of work on the expansion, slow progress added $350 million to the cost of the job and pushed back the completion date by almost a year. Delay in commissioning the expanded refinery costs the country more than just the identifiable overrun in construction. Until the expanded refinery is working, the fuels that it is meant to provide must be imported. This means that the savings the refinery will make possible are also delayed and the country has no course other than to import refined fuels. The extra costs and long delays have eroded severely the benefits that the expansion was to have provided. This loss, all the more regrettable because most of it was avoidable, is not as readily calculable as the overrun on the construction estimates. The overrun is bad enough. Once again, the customers will have to shoulder the burden — more than $lOO for every New Zealander — and the $350 million . also represents lost investment potential that could have been applied to some other project. For this sorry state of affairs, the greatest part of the blame must be laid at the door of industrial unrest.

Accidents on the site, including two unfortunate fatalities, have caused additional delays. The project has been subject to extra costs for some extra materials and equipment not allowed for at the outset. Damage to an essential crane during its shipment to New Zealand, and the cost of repair and the time lost, show how vulnerable the project is to misadventure. The crane will begin within a few weeks to do the jobs that had been scheduled for completion about six months ago. The project is large and complex, however, and at these early stages some of the effect of these delays could have been offset by transferring workers to alternative tasks — had there been no industrial conflict.

By the middle of last year, when the future of the project was in serious doubt, strikes and stop-works had accounted for the loss of fully a quarter of all possible working hours since the project began. In the first few months of last year, events reached their nadir and less than one half of the available man-hours were actually worked. These facts do not accord blame to any one party; fault has lain with the unions, the employers, and the Government. The justification for recalling these depressing statistics is to give point to the contrast that has occurred since the last quarter of last year. The last three months have been the most productive on the site to date, according to the project management, and industrial relations have improved out of all sight. Several factors have helped to bring this change about, chief among them being a reformed and more cohesive management structure, amalgamating the joint-venture contracting companies, and a more realistic approach to the task by the unions that are represented in the work-force. By whatever means the new spirit of co-operation has been achieved, it is most welcome. Speculation on why it took almost three years and the expense of some $350 million to achieve is probably idle; it should not be over-optimistic to expect that the lessons have been learned and that the confidence of the contractors is not misplaced when they predict completion of the job by March, 1986.