Kiwirail electrification contract awarded to overseas companies

A $371 million contract for the Papakura to Pukekohe rail electrification has apparently been awarded to overseas companies from China and South Africa. Apparently cost was the deciding factor.

Winston Peters, Minister for State Owned Enterprises:

“KiwiRail cannot be influenced by ministers in their tender process, and must follow government procurement rules, which at this time do not allow them to discriminate against foreign-owned companies.”

Obviously government procurement rules have to be followed, but this is a bit awkward for Peters who has promoted New Zealand business.

Neither Labour nor NZ First have done anything effective to change the rules.

And now the Government is currently trying to promote local business to aid recovery from the economic impact of Covid-19.

NZ Herald: NZ firms Fletchers and Downer ‘fuming’ as $371m Govt KiwiRail contract goes overseas

Construction companies Fletcher and Downer are reportedly “fuming” after a $371 million Government rail contract has been awarded to overseas companies – costing the Kiwi firms hundreds of local jobs.

Three sources within the companies have told the Herald on Sunday they were unsuccessful in their joint bid for the Papakura to Pukekohe rail electrification contract in South Auckland.

Construction companies Fletcher and Downer are reportedly “fuming” after a $371 million Government rail contract has been awarded to overseas companies – costing the Kiwi firms hundreds of local jobs.

Three sources within the companies have told the Herald on Sunday they were unsuccessful in their joint bid for the Papakura to Pukekohe rail electrification contract in South Auckland.

The source said the contract would have saved many of the 1000 local jobs slashed late last month in response to Covid-19 economic losses.

KiwiRail chief operating officer of capital projects David Gordon would not confirm the contract was already decided.

Gordon admitted price estimates were a factor in judging the applications.

Minister for State Owned Enterprises, Winston Peters, would not be drawn on the wisdom of the KiwiRail electrification contract going overseas, but pointed out the unsuccessful firms could still win another $315m Auckland rail project soon.

“KiwiRail cannot be influenced by ministers in their tender process, and must follow government procurement rules, which at this time do not allow them to discriminate against foreign-owned companies,” Peters said.

Newshub in 2017:  The comprehensive list of Winston Peters’ bottom lines

Mr Peters wants all Government carpet procurement to be sourced from New Zealand woollen carpet manufacturers. It also applies to all other Government procurements: buy NZ-made products first.

LIKELIHOOD: HIGH. This is an easy win for Mr Peters, with both Labour and National unlikely to fight him on this one. It could mean higher costs for Government departments though.


It’s also embarrassing for Labour who kicked up a big stink about KiwiRail contracts not being kept local when they were in opposition.

Labour leader Phil Goff in 2011: Labour policy to retain jobs

Kiwi jobs will not keep disappearing overseas if Labour gains power, party leader Phil Goff said in Dunedin last night.

Launching Labour’s procurement policy before Hillside Engineering rail workers and others, Mr Goff said government departments would be required to look at the wider economic benefits when tendering contracts.

Keeping work local contributed to the tax base, while building workers’ skills and creating job opportunities.

Local firms would miss out only where there was an overwhelming economic case for tenders to go off-shore.

Labour leader Andrew Little in 2015: Labour will use buying power to create jobs

Labour will use the government’s $40 billion in buying power to create jobs and back local businesses by requiring suppliers to make job creation in New Zealand a determining factor for contracts, Opposition Leader Andrew Little says.

“Labour will require Government organisations to design contracts so that companies focused on job creation have a fair chance of winning them, and then oblige them to report on the value of contracts they have awarded based on this criteria.

“It’s time to put Kiwi jobs and businesses first,” Andrew Little says.

Five years later it’s as important than ever that local business is supported. Awarding a rail contract to overseas companies may be a reality of economics, but if this was a National government it’s likely that Labour and Peters would have been making a noise about it,

Rugby Australia intend to sack Israel Folau, NRL rule out a switch of codes

Rugby Australia says they intend to sack Israel Folau “In absence of compelling and mitigating factors, it is our intention to terminate his contract”.

This dents Australia’s chances in the Rugby World Cup later this year, but they appear to have little choice, after Folau’s homophobic, forniphibic, idolphobic, fibaphobic, drunkaphobic social media post.

The NRL has also stated that they would not allow Folau to return to league – NRL won’t allow sacked Israel Folau to rejoin the NRL

Any hopes of a rugby league homecoming for fallen Wallaby Israel Folau have been dashed after ARL Commission chairman Peter Beattie sensationally banned him from the NRL on Thursday night.

While up to nine NRL clubs may have the financial means to sign Folau, the governing body has ruled out allowing them to take a risk on the controversial star ending any hopes the former Kangaroo could seek refuge in the code which gave him his start.

“Israel Folau fails the NRL’s inclusiveness culture which is a policy strongly supported by the Australian Rugby League Commission,” Beattie told the Daily Telegraph on Thursday night.

“As a game, we have a clear position to be inclusive.

“From our point of view rugby union has made a decision that clearly rugby league would support.

“The ARLC therefore would not support his registration to play in the NRL.”

Folau is finding that ‘free speech’ can have consequences, especially when one ignores contractual agreements not to repeat making divisive public statements. He said that just about everyone will go to hell if they don’t repent (which is a ludicrous concept), but his lack of repenting will guaranetee’s his sports career will go to hell.



Ardern: “Because it was in the agreement and they’re contracts”, except…

Going by the Question Time transcript of the first few questions (there doesn’t seem to be video available yet) it was a bit of a shambles today. Perhaps everyone had been unsettled by a pointless waste of time going on about a baby somewhere else in the word – it could be chaos with a more local birth in a month or two.

One short exchange was more effective than the rest of the shemozzle.

David Seymour: Why is the Government honouring existing irrigation contracts?

Rt Hon JACINDA ARDERN: Because it was in the agreement and they’re contracts.

David Seymour: Why is that different with partnership schools?

Rt Hon JACINDA ARDERN: We’ve given partnership schools an option, and the majority of them look to be taking it up.

That may be ACT’s only questions for the week, but Seymour did a good job with them. Ardern really set herself up.

Partnership Schools had contracts, but the Government pretty much ignored that and gave them a choice of ‘taking up’ one option, or being forced to shut down.

Serco to be barred from Mt Eden contract renewal

It’s not very surprising to hear that serco’s contract to run Mt Eden prison won’t be renewed at a contract break point in 2017 although Serco would be able to re-apply.

What I do find a bit surprising is that the news needed tol be searched out about, it was nowhere near headlines where I looked.

Newstalk ZB reports: Serco sacked from Mt Eden contract

Private prison operator Serco’s contract to run Mt Eden Corrections Facility will not be renewed.

The company’s contract is up for review, and Corrections chief executive Ray Smith has recommended that it should not be extended beyond next year.

Cabinet has now approved Smith’s recommendation.

Management of the jail was taken off the company after a string of incidents including prisoner assaults and fight clubs earlier this year.

Smith spoke to Serco’s Asia Pacific chief executive last night, and the focus on both sides is to manage the transition carefully.

“This is a practical, logical next step that’s available to us. We’re taking it. They understand that. For all parties now, what’s really important now…is that we want a safe prison.”

Corrections Minister Sam Lotu-Iiga said it doesn’t look as if Serco has grounds to challenge the decision, and it’s response has been pretty much to accept it.

Smith reports either party can seek to break the contract at the six year mark.

“I think the contract’s given us all the leavers that we needed and we’re using them as appropriate,” Smith said. “When you put these things together, one of the reasons you want a break point in it is because things do change.”

This is embarrassing for Serco in their first term of their contract, but they seriousy embarrassed the Government and Corrections – and seem to have been less than satisfactory in their care of prisoners – so this seems fair enough.

It will be interesting to see if a private option is sought, and if so whether Serco tender again. I expect they probaly would, but their record will have to be overcome with a convincing pitch.



Salvation Army say they tendered for gambling contract

Green MP Denise Roche claimed that the Salvation Army was awarded the problem gambling contract without tendering for it, but the Salvation  Army says this is wrong.

Oddly there isn’t any press release on this on the Green website, but this is at Scoop:

Problem gambling decision raises serious questions

Revelations that the Salvation Army was awarded Problem Gambling’s contract without seeking it raise serious questions about how that decision was made, the Green Party said today.

“The fact the Salvation Army said it did not tender for the contract to supply problem gambling services, yet was awarded it, adds weight to the allegation that the Problem Gambling Foundation were being punished for its opposition to the SkyCity deal,” said Green Party gambling spokesperson Denise Roche.

“Problem gambling is a serious problem in New Zealand and those fighting to deal with the problem should not be punished for doing their job.

“I think the Government and Health Ministry have serious questions to answer about how this contract was awarded.

“Have their been any other occasions when an organisation that did not even tender for a Government contract got it? It is a highly unusual situation.

“This decision needs to be revisited. New Zealanders will not accept this treatment of an advocate fighting to make life better for people.”

It seemed odd to be awarded a contract you hadn’t tendered for.

NZ Doctor have done some checking.

We tendered, says Salvation Army

But the head of the Salvation Army’s Addiction Services, Captain Gerry Walker, says this is wrong.

“We tendered for it,” he told New Zealand Doctor, “We tendered for what we believed we had the capacity and capability to deliver.”

Captain Walker says he does not know where the idea the Salvation Army was surprised to receive the contract had come from and that it had not described itself as the “national provider”.

“There is no surprise. We have been waiting to hear what we will be contracted to provide.”

I think there’s valid questions to be asked about the tender and how the service can best be provided but making this a highly politicised issue and making what appear to be incorrect claims is diverting from what should be examined.