OTIRA TUNNEL

Evening Post, Volume LXXXIV, Issue 105, 30 October 1912, Page 3

OTIRA TUNNEL

CONTRACTORS AND PARLIAMENT REPORT OF COMMITTEE DEBATED SHOULD THE WORK BE COM- # PLETED. Some time was occupied by the House of Representatives yesterday in discijssing the report of the Select Committee set up to consider the petition of the contractors for the Otira tunnel. The chief features of the committee's report, . already published,' were as under :■— That the contractors have, under great and varying difficulties, endeavoured to carry out the terms of the contract, and have sustained heavy losses both in connection with the Otira tunnel and Wellington dock contracts. That, in view of the whole of the circumstances and of the difficulties experienced by the contractors, the Government be recommended to release the contractors and. their sureties from their contract if the contractors so desire, and to return to the contractors the sum of £5000, the deposit paid. That the Otira. tunnfel is a national work, and should be completed. That the Government be further recommended to invite tenders for the completion of the . contract, and that, pending a decision on such tenders, the Government should carry on the works. .That, in the event of no satisfactory tender being received, the Government be recommended to take such steps and mako such arrangements for the completion of the works as a national undertaking as they may think advisable. IN SUPPORT OF THE S REPORT. Mr. ' Lee (the chairman ' of the committee) said the committee had gone fully- into tho question, from the contractors', the public works', and the laboiir point of view. The original estimate of the Public Works Department for' the work was £500,000, and in fixing that estimate a large amount was added for contingencies usually allowed in tunnel contracts. It was expected that the work would be done for that amount. The tender of M'Lean and Sons at £599,794 was accepted, the work to be completed in five years. When the petition was presented the contractors had made a loss of £53,418. One-third of the work had been completed. The railway from< Springfield to Brunner could not become payable until the tun* ,nel was completed, "and on that work the sum of £1,432,613 had already been expended. If the work was not to proceed there was a yearly dead loss to the Dominion. If when the line was through it would pay more than interest, , thai; excess amount would go to pay the excess cost of • construction. The wages question did not enter largely into tho matter. The wages paid had Aeen by way of increase, ■ ana he thought the labour troubles had- been met reasonably on both sides, but his own opinion was that the work could not possibly be carried out at the cost fixed by the Public Works Department. The work on tho tunnel was unattractive, even at the high rate of wages offered, and it seemed impossible to get full work out of men engaged on such a contract. It had been estimated by the contractors that it would cost from £130,000 to £140,000 above the amount of the tender to complete the work. The chief engineer had stated that the tender of £500,000 had been based on an experience which had been proved to be incorrect. main fact was that there was not sufficient labour to man the works. ■ The report of the committee meant that if the deposit of £5000 was returned to the contractors the sum of £198 would be paid to them, and that the plant, which cost £78,000, would be taken over by the Government at £34,411 and that the surety would be released. "NO QUESTION 01? PARTY." Mr. Seddon expressed the opinion that the report should be considered from a national point of view." The Prime Minister : There's no question of party in this. Mr. Seddon went on to urge the importance of the tunnel from the West Coast point of "view, and he ' expressed the opinion that when it was completed there would h& sufficient traffic to pay interest on the cost of construction. Mr. M'Le*n, t the present contractor, had stated that he would not tender if tenders were called again, and Mr. Seddon urged that tho Public Works Department was able to carry on the work. It had already done similar works of considerable magnitude. He referred to the trouble that Mr. M'Lean had on regard to labour difficulties. SHOULD NOT BE STOPPED. Sir Joseph Ward said that the country . had years ago been • committed to this great undertaking, and the question was whether that work should be stopped. Something like £1,800,000 had. already been spent, on the Midland railway, including the expenditure by the old company, and he contended that it would be unbusinesslike to cease the work. "It would be almost an act of insanity," he added, "to discues whether we should turn off the prosecution of this important railway." The Government' ought > not, he argued, to hesitate in carrying on the work under the Public Works Department. He did not blame the workers on the contract; the water conditions were very bad ; but ' th« troubles _ that arose had been a ■ factor in bringing about the present position. If the contractors had lost £53,000, as was shown to bs the case, he wanted to know whether the country would gain anything by compelling the contractors to go into liquidation. In the meantime the works would be stopped. He added that the contractors had been politically opposed to him, but he did not think that politics ought to h& considered in euch a matter. (Hear, hear.) The Chief Engineer in his evidence made it very clear that tho circumstances had changed considerably since the contract was entered into, and that the data on which the estimate was based were not sufficiently reliable. On the whole, he thought the contractors should, bo released, on the lines of the committee's report, and that the work ehould be carried on by the Government. CONTRACTORS HAD DONE THEIR BEST. Mr. John Bollard said he believed the Government Engineer's original estimates of' the cost should have been £700,000, instead of £500,000. H« gave an opinion that workers at Otira had asked for unreasonable terms ; he believed tKat they had tried 'to ' get an extra £100,000 out of the contractors because they believed that the firm was to receive '£100,000 more than the* contract was worth. A member : That is not in the evidence. Mr. Bollard adhered to his statement. He submitted that the contractors had done their level best to carry out the contract, and they should not be, harshly treated ; tliey were now absolutely ruined ; the House ehould at least -, be ' merciful. . "We should give them £15,000. or £20.000 and cry quits," he concluded. Mr. Buddo urged that one important reason fo"r completing the tunnfel and the Midland Railway was the consideration of national defence. He did not think the committee's report erred on the side of liberality to the contractors. Mr. Okey eaid it iivould be unwiee to

cease work at the tunnel. The contractors had done everything possible to pueh the work through, and they should not be penalised. If some way could be found to allow the M'Lean Company to carry on the work, there would b*e a saving of time and money compared with the co-operative sytem. Mr. Myers stated that after studying the evidence and all tho circumstances of thp case ho had come to the conclusion that the House would be justified in giving effect to the committee's report, lie wafl sa-tisfiwl that the contractors, men of ability and integrity, had tlone all that \va6 humanly possible to carry out their contract MORE INFORMATION NEEDED. Mr. Buchanan held that the information so far placed before the House would not warrant it in reaching a conclusion this seceion. It should be left for the Government to obtain further information. Members : What kind of evidence ? Mr. Buchanan: Export evidence. Menibere : Where from ? Mr. Buchanan : Wherever it can be found. He would object to committing the country ii» this matter until addi« tional facts were obtained. CABINET'S DUTY. The Hon. W. Frasef remarked that tho final responsibility would rest on Cabinet, which would not shirk its duty. It would be necessary ,to consider the general principle of contracts. It was possible that other contractors who got into difficulties might also seek relief. This aspect and others would not be overlooked by the Government, which would have due regard for. the arguments advanced in favour of the company. However, he would iiot say now "what would be dond. It was a matt&r for Cabinet, which, h& was sure, would do its duty to the country, and at the 6ame time be fair and just to the contractors, who had suffered heavy losse*. Mr. Colvin made an appeal for the contractors. The House should not ineist on having its pound of flesh. 1 The Hon. R. M'Kensie eaid he agreed

with some parls of the report, a-nd ■disagreed with other portions. The bookvalue of the plant, given as £78,000, was the face value, as stated by the accountant ;ho urged another valuation. Mr. M'Kenzie drew attention to an item of huts, for which, he said, the money had been advanced by the Government, and they had not cost the contractors a penny. However, ihe favoured a return of the £5000 deposit to the contractors, and release from the surety of £25,000. The wholo matter should have been settled between the Government and the contractors; it was a question of administration. Parliament was not'justified in dealthg with a' petition for relief from a contract ; he had not heard of a similar thing being done previously. Ho had no objection to fair and reasonable treatment of the contractors, but this was a question for the Government rather than for Parliament. Replying to the debate, Mr. Lee contended that -it was only natural that the petition should have been referred to a committee, but there was no suggestion that the Government should be relieved of its responsibility in the matter. The committee, he added, had, been greatly helped in arriving at a conclusion by the Hon. ft. M'Kenzie, who had great ex> perienc© in carrying out public works. The matter was one for decision by the Government, and not by the House, but he thought it was as well that tho Government sho'nld have a general idea oi the opinion of the House on the subject. The Prime Minister said he understood that it would now be for the Government to consider the report. Mt.- Buddo moved that the* report be referred to the Government for favourable consideration. This wa« agreed to on the voioes without discussion.