ARAPUNI SCHEME.

Hawera Star, Volume XLVII, 14 December 1927, Page 7

ARAPUNI SCHEME.

SETTLELMFIXT Ob’ DISPUTE

A All XI STERI AL ..STATEMENT (BV TELIiOUAI’H i’IIKSS ASSOCIATION.) WELLINGTON, Dec. 12. .In official statement was issued Jato this afternoon by the Government- covering the- .settlement which lias been arrived at with Sir \V. G. Armstrong, Whitworth and, Cbmpauy, eont* actors for the Arapuni hydro-electric scheme. There were two separate contracts for which lenders were called. One was iortho construction of the dam and headworks to divert the river and impounu the water, called No. I Section, and ilio other was for the construction of the power-house- and switching station, with all equipment penstock tunnels and a considerable amount iff incidental wdrks, called Xu. 2- Section. The Armstrong-Wh-it-wo.i th Company were the successful tenderers for both sections, which were consequently tieated as one entire contract'. The contractors have been engaged on the work since about September. 1112-1. The time fixed for the com-ple-on of Nik 1 Section expired on July 11. ,1927. ami the work i.- now just about finished, beyond the usual claims and adjustments common to all big con-tracts. It is not anticipated any difficulty will arise respecting No. ! Section "either as to- the nature of the work or as to the payments to be made In regard to No. 2 Section, the eon11actors some months ago claimed tint! the specifications as. to- the site on which the power-house was to be erected were faulty and in consequence claimed that the- nature of the fault was such as to absolve them from proceeding further with their contract. They refused to continue the work, except under a- re-arrangement which would have involved the Dominion m «i> highly increased expenditure without (in the opinion of the Government engineers) any commensurate advantage . The Public Works Department denied that any fault existed, and in - their view a deep hole discovered was no more than might have been expected and could have been overcome by - extra work. The department gave the contractors notice to carry on in ac- T cordance with the contract. This the \ contractors were unwilling to do, ex- j eept upon terms which -the Government would not accept. Consequently’ a r deadlock was .reached. In September the Kt. Hon. E. j Shortt. K.C., arrived in New Zealand, T

representing the contractors, to look nlo the matter and. if possible, come o a -.settlement. Protracted negotiaJous took place between the Governnent and its legal and engineering nclisens on the one hand, and Air.

Short-t- and the company on the other. As a result an agreement has been' arrived at, of which the following are ’he essential features: The contractors are to finish No. I Section in accordance with the specifications. The contractors are to be delivered from proceeding further with No 2 Section, the Government paying them schedule rates according to the contract for the actual amount of work done and an additional sum of £39,00.) to cover the cost of preliminary and

temporary work and extras and expenditure incurredj. by the contractors, of which the Public Works Department will have the benefit, including hubs and buildings. The actual cost to the. contractors of the work in respect of which the Public AVorks Department is paying this sum of £30,000 was considerably in excess of that amount. The Public Works Department will now take over No. 2 Section and finish it. in accordance with the original specifications, and erect the powerhouse on the site specified. The Government engineers estimate they will he able to finish the work'satisfactorily at a cost which (with payments already made to the contractors) will not greatly exceed the original contract price. The- main consideration which influenced the Government in making the settlement were that the dispute, if not settled, would have involved costly and protracted litigation and. though the- Government was advised by eminent counsel and engineers that its case was perfectly sound from both the legal and engineering points of view, it was felt that the essential thing was to get the work completed and revenue-producing with the '-cast possible delay. The contractors represented that they would require 37 months from now to complete section No. 2 if thev iiad to complete it according to specifications. The Government engineers anticipated being able to complete it in about ]8 months Adding the- difference of 19 month* to th? period of delay consequent upon litigation, and bearing in mind that the anticipated revenue from Arapuni when completed is about L'150.000 per annum, tb« country has everything to gain byexpediting the work. The Government engineers arc satisfied that the power-house can he hit ill on the site specified, and have undertaken to do the work themselves in accordance with their own specifications. Th-s lilt mate rnct of the whole work under the arrangement which has been made should not be greatly in excess of-the contract price. While- the Gov-vniii-ciit was not prepared to accept the proposals previously made by the eon11actors or by Mr ’.Shortt on their behalf. the tina 1 proposals which have n,»\v been accepted and which were the result of considerable negotiations and dhaaission. the 'Government -regard as •i fair and reasonable- arrangement and nn.-’ which is in the int.ei-e-sts of the Dominion. A statemmt has been published Dial •‘finally the contractors are to complete No 1 section, but the claims that might i.;,ve been made bv either party in re-•--wc-t of losses arising from drtlnv in completing the contract, or on othei gro-’iids. lias been waived.” This statement is not correct. The -agreement made for a settlement contains no such rrnivsion and neither party lias waived a,iv rights that thev may have in ret -if No. 1 Section.