ARAPUNI HYDRO SCHEME

Hokitika Guardian, 13 December 1927, Page 2

ARAPUNI HYDRO SCHEME

a OYERXA [ EXT STATEM EXT. BY TELKGItAPII PIIESS ASSN - ., COPYRIGHT. WELLINGTON. Dee. 12. The Government has issued a lengthy official statement coverinr the settlement arrived at with Messrs Armstrong-Whitworth Company, con-

tractor? for the Arapuni hydro-electric schemes. Inter-alia, the document states: “iln regard to No. 2 section, the contractors some months ago claimed that the specifications as to the site oil which the power house was -to tie erected, are faulty, and in consequence claiming 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-arrange-ment which would have involved the Dominion in liiglilv-increased expenditure without (in t"ie opinion of Government engineers) any commensurate advantage. The Public Work's Department denied that any fault existed and in their view, the deep hole discovered was no more than might have been expected, and could have been overcome bv extra work, and gave the contractors notice to carry oil in accordance with'the contend. This the contractors were unwilling to do except upon terms which the Government would not accept. Consequently a deadlock was reached. In September, the Rt. Hon. E Shortt, K.C.. arrived in New Zealand .representing the contractors to look into the matter and if possible to come to a settlement. Protracted negotiations have taken place between the Government and its legal and engineering advisors, on the one hand and Mr Shortt mid the Company oil the other and as a result an agreement lias been arrived at.”

The following were the main considerations which influenced the Government in making the statement: (a) The dispute, if not settled, would have involved costly and protracted litigation, anil though the Government were advised by eminent counsel and engineers that their case was perfectly sound from Ixitli legal and engineering points of view, it was felt that the essential thing was to get the votk completed, and revenue producing, with as least possible delay; (b) Ihe contratcors represented that they would require 37 months from now to complete section No. 2, if they had to complete it according to specifications. The Government engineers anticipated being able to complete it in about 18 mouths. Adding the difference of 19 months to the period of delay, consequent upon litigation, and hearing in mind that the anticipated revenue from Arapuni. when completed is al»out £150.000 per annum, the country has everything to gain by expediting the work; (c) The Government engineers are satisfied that the power house can be built on the site specified, and have undertaken to do the work themselves in accordance with their own specifications; (d) The ultimate cost of the whole work, under the arrangement which has been made, should not be greatly in excess of the contract price.