Tendering difficulties not deliberate—Mr Birch

Press, 28 May 1984, Page 6

Tendering difficulties not deliberate —Mr Birch

By OLIVER RIDDELL in Wellington Difficulties experienced by New Zealand companies in tendering for work on the major energy-based projects did not arise deliberately, according to the Minister of Energy, Mr Birch. He told a heavy engineering industry conference that it had been evident from early on that there were some big problems to overcome on the projects if New Zealand firms were to have the chances that they should. In tendering for some projects, New Zealand firms had had not enough time to prepare bids. There had not been enough information on exact requirements and some specifications had been unfamiliar, Mr Birch said. Some contract terms and methods of payment had also been unfamiliar. These situations had resulted from a lack of understanding by overseas project developers of the way the New Zealand industry worked and, in turn, the inexperience of New Zealand suppliers when it came to working in an international environment. The Government was committed to measures that made tendering clearer, he said. For example, the Govern-

ment’s approval for the New Zealand Steel Stage H project was conditional on advice being given to the Trade and Industry Department when bid packages were being released, and the names of the New Zealand companies to whom they had been sent New Zealand industry was given seven days in which to respond to the department as to the adequacy of the documentation, size of the package, and whether or not the companies chosen to bid were the most appropriate.

The job of the Government was to lift the New Zealand content in the projects, but not to choose between the bidding companies, Mr Birch said. There had been a cost in lifting the New Zealand content; it would in many cases have been simpler and a lot cheaper to contract an overseas supplier for much of the plant and equipment which had been placed with New Zealand companies as a result of the Government’s policies. “We have not always been prepared to pay the cost,”

he said. “It was going to prove so much more economic to have the construction of the S re-assemblies for the synletic gasoline plant at Motunui done entirely in Japan that, on balance, we decided thdt the New Zealand content would have to be foregone in the interests of a project constructed on time and within budget” Generally, Mr Birch said. New Zealand heavy engineering could be “well satisfied” with opportunities afforded it on the major projects.