Rural mail

Press, 8 October 1987, Page 12

Rural mail

Sir,—Regarding the article headlined "Rural mail delivery contracts renewed” (September 28), I feel there are many unanswered questions in New Zealand Post’s statements. New Zealand Post claims it has saved 1500,000 by going to public tender with these contracts. It has not said whether this figure is before or after the tender advertising expenses have been taken into account Has it taken into account administration costs, etc.? Could New Zealand Post please state: (1) What have the administration costs been of tendering these mail contracts throughout New Zealand? (2) What is the figure for the advertising of these contracts (46 contracts being tendered a second time)? (3) Is Mr Nicholas aware of the amount of good will

lost, by existing contractors, wip now have no business, job or livelihood? I wonder if Mr Nicholas and his associates in New Zealand Post would consider putting their jobs up for public tender, to see what savings could be made in this area. — Yours, etc.,

L. B. MAY. September 29, 1987.

[The district manager of New Zealand Post, Mr P. J. Nicholas, replies: “I can assure L. B. May that the costs of advertising tenders and general related administration expenses are small compared to the savings gained by putting rural deliveries out for public tender. The reasons for calling tenders have been well publicised in recent months. I am aware that existing contractors who were not successful with their tenders would have lost the goodwill they paid to previous contract holders. Despite the fact that the goodwill factor has always been discouraged by New Zealand Post, some contractors paid extraordinary amounts for goodwill, often totally out of proportion to the actual Income being derived from carrying mail. It must be remembered, however, that a rural delivery contract is just that: a contract to carry out work for New Zealand Post for a set period of time.”]