ARAPUNI CONTRACT.

Manawatu Standard, Volume XLIX, Issue 290, 6 November 1929, Page 8

ARAPUNI CONTRACT.

DETAIIiJ OF SETTLEMENT. Per Press Association. WELLINGTON, Nov. 5. Full details of the settlement of the heavy claim by the Armstrong-Whit-worth Company on being relieved of the final portion of the Arapuni hydroelectric construction contract were submitted to the House to-day by the Minister of Public Works, in response to a motion from Mr J. S. Fletcher. It was shown that the company was paid £30,000, in addition to schedule rates for the work done and materials available to the Public Works Department to complete the contract. Mr F. W. Furkert, engineer-in-chief, in a memorandum covering the information, stated that it would be difficult to give even a summary of the whole negotiations, but he gave sufficient details to make the position clear. The Armstrong-Whitworth Company did not in the beginning formally ask to be relieved of its contract, but endeavoured to escape from its responsibilities under the contract, which called on it not only to build the power-house, but to design _ it, by asking the department for directions as to what it should do when it found difficulty in connection with the unwatering of the foundations. Naturally. to have commenced giving detailed instructions to the contractors would have relieved them of their major responsibility and would have thrown on the Government the responsibility for making decisions and devising schemes for which it was already paying the contractors. The contractors took up the stand that what the department asked them to do was impossible. That it was not impossible had been amply demonstrated, since, after) considerable argument, the contractors had put ■ forward certain suggestions and asked that the Government should approve of them, therebv taking the responsibility for the success or otherwise of what was proposed, and they also wished to be paid for the cost of doing anything in excess of what they had originally contemplated. Their contention oould not-be accepted. Meanwhile, they had ceased work on the most essential part of the job. The department served them with various notices to get on with the work, and finally a special King’s Counsel was sent out from London by the company to negotiate direct with the Government, with the idea of getting out ot the contract altogether. He endeavoured to put the blame for the trouble on the department by stating it had induced his principals to take a contract to do what was impossible and what the Government officers knew in their hearts was impossible. _ The Government officers never admitted this contention and have since proved the contrary. “In pursuance of this attitude, the company’s representative mentioned some extraordinary high figures as compensation for the cancellation of the contract, after having prepared a scheme which varied from the proposals which were included in the original contract. He claimed that the Government should take the responsibility for the new proposals and that his company should be paid the extra cost of this variation, plus the costs of any excavation and concrete to below the levels shown on the plan submitted by it for approval, plus the cost of reinforcement for such foundations in addition to the original, plus the cost of bearing piles, if required, and plus the sum of £275,000 to cover direct and indirect loss. The Government could not agree to any of this. If the contractors chose an alternative, the onus was on them to pay for it, and if they lost money on their contract it was their affair. After a lot of argument a settlement was made. _ The company was paid for the work it had done at schedule rates, so far as schedule rates could apply, and was paid £30,000 for the preliminary works.”