International competition likely for contract

Press, 23 January 1988, Page 15

International competition likely for contract

PA Wellington Companies bidding for the $7O million revamp of New Zealand’s airways and radar systems are also having to work out a financing package so the new Airways Corporation can pay for it. Tenders for the lucrative contract close on Thursday and international competition is expected from high tech companies. Some have formed joint ventures with New Zealand firms in a determined effort to win the contract. Britain’s Plessey Radar, Ltd, and Cossor Electronics — world leaders in radar technology, have a liaison with Wellington’s MarineAir Systems, for

example. The contract is to replace the 25-year-old radar and radio systems at Auckland, Ohakea, Christchurch and Wellington with a new fail-safe primary and secondary radar chain, and a new airways flow system of navigational aids and routing. The terrain and climate of New Zealand, and the chance to replace New Zealand’s entire system with what would become a world showpiece, make the contract alluring enough. The only problem is how to pay for it. The new State-owned corporation, the smallest and possibly the most demanding and complex

5.0. E., is already burdened with a $lO million loan from the Government as part of the $52 million purchase price of its assets. Within two years of formation, the corporation is having to take on a project costing one and a half times that of its entire business. The cost will eventually be met by airways users — and their passengers — in a complicated pricing system being worked on by the corporation. But the corporation's chief executive, Mr Frank Baldwin, said last week that a finance package would be an integral part of the radar revamp contract. A decision on the con-

tract is expected in June, followed by negotiations with the successful tenderer on detail. The system will be running by mid--1990. "Part of the tender is also a financial tender,” Mr Baldwin said. The financial package may be forwarded by the hightech company, or put forward as a separate deal by its bankers or finance arm. “They could say ‘here is our product and we will assist your financing of this programme this way’,” Mr Baldwin said. A package that sought shares or equity in the fledgling corporation was unlikely to be considered, he said.