NO EXORBITANT PRICES

Evening Star, Issue 22683, 24 June 1937, Page 6

NO EXORBITANT PRICES

STATE HOUSING CONTRACTS DISPARITY IH CONTRACT QUOTES OUTSIDE COMPETITION MAY BE ENCOURAGED [Special to the ‘ Star.’] WELLINGTON, June 24. Announcing the results of the recent tenders for houses in provincial towns, Mr J. A. Lee, M.P. (Under-Secretary of the Ministry of Housing), makes pointed comment on the disparity in prices at Gisborne, declaring that the Government has no intention of paying exorbitant prices, which involve an extra burden to tenants. Tenders, lie states, recently closed for the following housing schemes: — Hastings, 28 houses; Oamaru, 13 houses; Invercargill, 22 houses; Gisborne, 13 houses. In the Hastings scheme, the houses were grouped into six different contracts, varying in size from 12 houses to one house. The variation in the size of contracts is designed to give, small contractors every opportunity of tendering. Only two contractors submitted tenders. One contractor submitted a tender for one contract, comprising 12 houses, and another contractor submitted a tender for one two-house unit. No tenders were received for the other four contracts. The tender for the larger contract is unduly high, and will be declined. The tender for the two-house unit is reasonable, and, subject to a satisfactory schedule being submitted the contract will probably be awarded to A. W. Apperley. At Oamaru the scheme was divided into five different contracts, varying from a maximum of four houses to a minimum of one house. Tenders received for this scheme were not yet completed. In Invercargill the scheme was divided into five different contracts, varying in size from eight houses down to two houses. Ten tenders were ■ received from four different contractors, apd .the lowest tenderer for all five contracts was R. Richardson, who, if satisfactory schedules are submitted, will be awarded all five contracts. The amount of Mr Richardson’s tender is satisfactory. In Gisborne, the scheme was divided up into six different contracts, varying in, size from, five houses down to one house. Sixteen tenders were received from four different contractors. The whole of the tenders are considerably in excess of the prices being obtained in other parts of New Zealand, and will be declined. FRESH TENDERS TO BE CALLED. In all the above cases where tenders are being declined, fresh tenders will be invited by public - advertisement at an early date.For the information of the public and for purposes of comparison, the following details are submitted in re§ard to the lowest tenders received in ifferent centres. One particular design of house has been included in the contracts. In Lower Hutt, Hastings, Invercargill, and Gisborne, this house is of five rooms, its floor area being 1,023 square feet. The _ following are the lowest tenders received for tiffs particular design in the four centres mentioned above, the figures excluding any allowance for fences or footpaths:— Lower Hutt, £1,017 7s. Hastings. £1,112 7s lid. Invercargill, £l,OlB 10s 4d. Gisborne, £1,388 13s 9d.It will be seen, stated Mr Lee, that the lowest tenders for the same house in Hastings and Gisborne are about £94 and £370 respectively above the lowest tenders received in Lower Hutt and Invercargill. In. Oamaru the price has not yet been determined. . NO JUSTIFICATION FOR DISPARITY. “ The importance of these figures will be realised when it is pointed out that the difference in cost of £SO is equivalent to, at least, 1s a week for the rent which should be charged,” Mr Lee went on to say. There,was absolutely no justification for the wide disparity that existed in the various prices. They naturally would vary with location if. the scheme were far from the source of the essential materials; but a difference of £370 was astounding. It would bo seen that the Government was not paying a price in excess of £1 per square foot Tor the house in question, and it certainly had no intention of paying the exorbitant prices tendered in some of the towns mentioned. . Members for the districts in which tenders had been declined had done everything possible to secure the co-operation and aid of local builders, and, in some cases, competition from outside builders had actually been discouraged to give local builders a fair chance. The results had proved, however, that if tenants were not to pay extravagant rents during the lifetime of a house, the Government might be forced to take other steps than placing reliance on local builders alone when contracts for which no tenders had been accepted were readvertised.

The department hoped _ that quotations would be received which bore some closer relationship to the Invercargill and Wellington prices. Certainly, with the publication of the relative prices, there would be every inducement to firms all over New Zealand to step in and tender in any area where the prices submitted by local builders_ were unduly high Local builders anxious to keep the building industry booming in their own towns would be afforded a further opportunity by the readvertising of the contracts, and it was to be hoped that they would be able to make good. BEST RENT POSSIBLE. <c I want to say again,” concluded Mr Lee, “ that the Labour Government has no intention of paying what it believes to be an exorbitant price. It is up to the firms likely to be interested to make a further effort if other action is not to be taken to secure houses for the people_ of these localities We have no objection _ and have encouraged groups of builders, whether master builders or co-operative groups of trade unionists, to submit prices. We are prepared to do all in our power to help local industry, but we have to safeguard public expenditure and secure the best rent possible. For some of the contracts a price of 18s and a fraction a foot has been received, as against the Gisborne tender of close on 305.”