Niwa defends decision to use Singapore company
The decision to send research vessel RV Tangaroa to Singapore for a multi-million dollar upgrade was not just about the money, the head of the National Institute of Water&Atmospheric Research (Niwa) says.
The Engineering Printing and Manufacturing Union (EPMU) and the Labour Party have criticised the Crown-owned research and consultancy company for awarding the contract to a Singaporean company instead of a New Zealand corsortium headed by VT Fitzroy based at the Devonport Naval Base Dockyard,
Niwa chief executive John Morgan told NZPA said that the difference between the bids was several million dollars, but the bids and the value of the contract were commercially sensitive.
"It was in the millions of dollars."
NZPA sources said the difference between the bids was $4m with the New Zealand bid at $9m, almost double that of the Singapore bid.
Mr Morgan said "a saving of several million dollars" was important but there were other considerations.
The contract is to install a dynamic positioning system (DPS) which enables a vessel to sit exactly in position in the water, important when research is being done at a specific location especially in waters too deep for anchors to reach the bottom.
"It's a very complex engineering installation, it involves cutting large holes in the hole and the side of the Tangaroa," Mr Morgan said.
The Singapore supplier had installed DPS before and significant component suppliers had agents stationed in Singapore.
"Singapore has a very significant ship building and ship maintenance industry so the supplier has 3000 staff on the site that are going to be doing the job so they had a tremendous amount of resources available to them," Mr Morgan said.
Niwa was confident the job would be done to a very high standard, on time and within the price without any engineering glitzes, he said.
Niwa had to be frugal with taxpayer money, he said.
The decision was Niwa's to make and while Research, Science and Technology Minister Wayne Mapp was advised he did not have input.
Dr Mapp supported the decision. "He understood it, he didn't want to interfere," Mr Morgan said.
EPMU national secretary Andrew Little said the loss of the contract was a missed opportunity to boost business for a New Zealand company and its 140 workers.
Labour Party economic development spokesman Shane Jones said he was worried by the decision and said it was a lost opportunity to upskill New Zealand workers.
"We may well be missing out on a range of economic benefits. The Government is supposed to be guided by a cost benefit analysis that considers the impacts of a proposal across all sectors of the community, rather than solely relying on fiscal savings, but I haven't seen any evidence that this has happened in this case."
Mr Jones said he saw merit in investment director Gareth Morgan's call to consider re-specifying the procurement policy of all government departments and state owned enterprises to buy local unless they can prove the ability to do the job doesn't exist here.
"Of course, each decision has to be considered on its own terms, but buying local wherever possible, keeping profits, tax revenue and skills in New Zealand, would offer one sure-fire way of kick-starting the economy."
Dr Mapp said the EPMU and Mr Jones had implied the financial gap was not large -- but it was.
"Crown Research Institutes are expected to make prudent decisions and they do."
Dr Mapp said he was not able to interfere in the decision, even if he wanted to.
VT Fitzroy had a range of contracts and was not dependent on winning the contract, he said.
"They win some and they lose some....It's also important to remember that we do actually have a free trade agreement with Singapore."