OTIRA TUNNEL.

Taranaki Daily News, Volume LV, Issue 186, 24 December 1912, Page 7

OTIRA TUNNEL.

CONTRACTORS RELEASED. GOVERNMENT WILL CARRY ON THE WORK. FRESH TENDERS TO BE INVITED. At a mooting of Cabinet on Friday the Government decided to release Messrs John McLean and Sons from their contract in connection with the Otira tunnel. Under an existing arrangement, Messrs McLean will carry on the work till Christmas. Cabinet decided that the Public Works Department will then continue the work, and fresh tenders for the completion of the undertaking will be invited, early next year. The Prime Minister informed a Times representative that until such tenders are returned, the Government will prosecute the works. The workmen at present engaged need, therefore, have no apprehension regarding any possible break in their employment. COMMITTEE'S RECOMMENDATIONS.

This decision by the Government practically gives effect to what was recommended by the Select "Parliamentary Committee which enquired into the petition of Messrs McLean and Sons 'last session. The committee's recommendations were:— '

That the contractors have, under great and varying difficulties, endeavored to carry out the terms of the contract, and have sustained heavy Tosses both in connection with the Otira tunnel and Wellington dock contracts. That, in view of the whole of the circumstances and of the difficulties experienced by the contractors, the Government be recommended to release the contractors and their sureties from their contract if the contractors so desire, and to return to the contractors the sum of £SOOO, the deposit paid. That the Otira tunnel is a national work and should be completed. That the Government be,further recommended to invite tenders for the completion of the contract, and that, pending a decision on such tenders, the Government should carry on the works. That, in the event of no satisfactory tender being received, the Government be recommended to take such steps and make such arrangements for the completion of the works as a national undertaking, as they may think advisable. HISTORY OP THE CONTRACT.

The contract price for tho work was £599,794, and the tunnel was to haTe been completed on August 9, 1912. The contractors lodged a deposit of £SOOO and sureties for £25,000, for the due fulfilment of the contract. On February 3, 1912, the contrators had done work and provided plant and material to the value of £24.9,882, and had received payments amounting to £216,173, leaving'a margin in favor of the Government of £33.709, hesides the contractors' deposit of £SOOO and the bond for £25,000. On May 13 Cabinet decided to advance another £IO,OOO to the contractors. Talcing into consideration the contractors' outlay, the committee's report showed that if at the end of June, 1912, the Government terminated the contract and seized the plant, the loss to the contractors would have been 53.418 13s lid. Calculated on the basis of the contract there would have been due to the contractors at the end of June a sum of £4802, after milking all allowances. This would represent the amount due to the contractors if the contract were cancelled and the plant and material taken over at half tho actual cost, as at the end of June, 1912. The contract was signed in August, 1907. GOVERNMENT ENGINEERS COMPETENT. During the discussion in the House on the committee's report, the Hon. W. Fraser, Minister of Public Works, said: Doubt had been expressed as to whether the Public Works Department could carry on this work, but he knew that there were engineers in the employ of the Department who were quite competent to carry it out. If it were forced upon them finally, quite possibly the Department might have to do it, and he had no fear of the result. He would, however, not like to see the Department carrying out the work, but would prefer to see it in the hands of a private contractor.