RCL director replies to garden ceriW

Ruapehu Bulletin, Volume 13, Issue 606, 3 October 1995, Page 7

RCL director replies to garden ceriW

John Martin, director of Ruapehu Construction Limited, has provided the following in reply to last week's letters regarding the Ohakune garden centre set up by the company: It is refreshing to see people rushing to their pen and paper to condemn the company Ruapehu Construction Limited for showing some initiati ve in setting up a garden centre in Ohakune. What is not so refreshing is seeing people (who should know better) stirling up public feeling with uninformed comment. Ruapehu Construction evolved from Ruapehu District Council' s business unit and was incorporated in June 1991. When this was done it gave Ruapehu Construction the right to tender for works outside its nominal environment. Until it was incorporated, theTransit New Zealand Act 1989 prevented it from doing so. The company was incorporated under the Companies Act 1955 as a private company. It is also subject to the provisions of the Local Government Act 1974, as it is owned by the Ruapehu District Council. The financial implications are that Ruapehu District Council sold its plant, equipment, depots and stocks to Ruapehu Construction Limited after they were independently valued. The date of this transaction was 1 November 1 993 and staff were transferred to Ruapehu Construction. The total value of the transaction was $1,235,000 and the company is totally owned by Ruapehu District Council. Under the Companies Act 1955 the Company in its Articles of Association has six directors, a secretary and an executive officer and operates independent of the district council. The company tenders for all works and has at the moment a turnover in excess ofabout $7,000,000. The district council has left Ruapehu Construction as a totally stand-alone com-

pany with no assistance financially apart from the original investment. A legal requirement is that no more than two directors will be members or officers of any local authority. The directors are charged with overall strategy, consider and approve objectives set out in the Statement of Corporate Intent, and ensure the proper management of the company. The council has a vital interest in seeing that the company performs well and maintains its position of overview by its participation in the process of preparing the Statement of Corporate Intent. Ruapehu Construction Limited so far has been a success story. It rose from the ashes of local government reform to become the leading contracting company in the Ruapehu District, controlled by directors and totally owned by the ratepayers. In the last three years it has contributed over $500,000 to the district council by way of dividend.

Added to this, independent valuation shows the company to be worth double the original shareholding investment. This has been achieved in four years and, under any scrutiny, must be regarded as a success. Nursery purchase In the transfer of assets, Ruapehu Construction Limited purchased a nursery on Taupo Road, Taumarunui, where council previously produced plants for sale. We were advised that we were operating outside town planning zones. We had contracts to the tune of $ 1 2,000 - $ 1 5,000 annually and private saies were around $10,000 - $12,000. This commercial side of the business has been in place for many years. The restrictions of the zoning meant either closing down our commercial activities or relocating. The directors

deliberated for some time, explored new options and decided to purchase an existing operation that was for sale. The result was the purchase of Orchids and Plants, which was advised to council in December 1994. Reporting the affairs of Ruapehu Construction to Ruapehu District Council is a statutory obligation. In the quarterly report dated 31 December 1994 in the non-financial report Item 2.8 states: In order to stabilise the Company' s ability to perform in the region of Nursery Production we have purchased the business Orchids and Plants and renamed it the Ruapehu Garden Centre. The additional nursery resources thus obtained will ensure the company can satisfy its contractual liabilities for the

Parks and Reserves of the district on a more economic basis. Ruapehu Construction has at 148 Taupo Road a very presentable facility in its garden centre and the people of Taumarunui are well served by this facility. We have actively promoted saies with competitions, specials etc. The southern part of the district, Raetihi, Waiouru and Ohakune, are restricted by distance in their ability to take part in such promotions. Same service south To serve the total district it was decided to open a garden centre in Ohakune to provide the same service to the peoples in the southern part of the district. This was done with some urgency so that spring plantings could be catered for. Ohakune needs a good

garden centre. This ntWBI ready been shown by the support we have received. People should be able to purchase their garden supplies where they desire to and if they don' t wish to use Ruapehu Constmction Garden Centre that is their right. The opposition expressed to the "Bulletin" is understandable. These people are protecting their own interests in business and is an expected reaction to a new venture. The fact that Ruapehu Construction created two newjobs in the garden centre and profits will be returned to the community are forgotten. I believe that Ruapehu Construction Lim-

a very successful busines^^l which the Ruapehu District Council and ratepayers should be proud of and grateful for the expertise and dedication of the staff, executive officers and directors for their efforts.