Champagne campaign

It was a sustained lobbying effort unlike any other for its sheer persistence and persuasive power. And when the Contractors’ Federation finally succeeded in convincing the Government to put the contract for building the Clyde Dam out to tender, the result was the industry organisation’s finest hour.   BY GAVIN RILEY

Clyde_1.jpgThirty years ago this year the Contractors’ Federation launched an intense lobbying campaign aimed at persuading the Muldoon Government to break with tradition.

The federation wanted the contract for the construction of the Clyde Dam let to private tender instead of having the project carried out by the Ministry of Works – the time-honoured way of building the bulk of state infrastructure.

Though the federation’s chances of success initially seemed doubtful, nearly three years later, at the close of 1980, the Government made the announcement that amounted to the best Christmas present the federation could have had – and the organisation’s finest hour.

Vigorous, youthful, able leadership was the driving force behind much of the campaign – the single-mindedness of which, it has to be said, did not please some of the federation’s members, even though it was to open the door permanently to an increased industry workload.

Against a background of a desperate shortage of work in the civil-construction sector, the campaign got underway in February 1978 when a federation delegation led by president Tom Draper met Energy Minister George Gair and Associate Finance Minister Hugh Templeton to discuss involvement of contractors in the Clutha Valley hydro scheme, which included the Clyde Dam.

The delegation argued that construction by contract was superior to mere plant hire and was cheaper than using government forces. It said government agencies should be responsible for planning, design, research and administration, and the private sector should carry out all construction work by the contract method. (At this time Baker Construction heavy machinery was already helping remove 350,000 cubic metres of rock in Clyde Dam preparatory work.)

Clyde_2.jpgIn April 1978 the federation handed a 48-page Clutha Valley Scheme by Private Enterprise report to Works Minister Bill Young. The report, commissioned by the federation from Auckland-based consulting engineer Michael Barker, was also circulated to key government and opposition MPs and to senior public servants. A federation deputation, including president Draper and director Ian Blincoe, later met Young and Ministry of Works commissioner Jack Chesterman to discuss the report, and federation vice-president John Feast and Young featured in a TV debate on the Eye Witness current affairs programme.

The following month the federation’s council meeting focused on the future of the civil-engineering construction industry and zeroed in on the issue of private-enterprise involvement in construction of the Clutha scheme. It was noted that the federation had pushed its proposal not only with the Works Minister and MPs but with the NZ Chamber of Commerce and the NZ Planning Council.

“We’re making an all-out effort with the Clutha issue in the interests of all members and the industry as a whole,” said director Blincoe.

Uncertainty over the future of the Clutha scheme coincided with, and caused concern at, the federation’s 1978 annual conference in Wellington.

However, Energy Minister Gair assured delegates that “continuity of the programme will be maintained” but added that progress had been slowed by procedural and legal issues.

In the weeks following the conference the federation kept the pressure on the Government to let the entire $500 million-plus construction component of the Clutha scheme out to the private sector, and in November Works Minister Young announced that more than 50 percent of the construction programme would be carried out by contractors.

By March 1979 the federation was getting impatient. “The National Government’s claim to represent private enterprise will stand or fall on its approach to the Clutha scheme,” recently appointed director Bob McKnight declared publicly. He said the federation had produced evidence, in four submissions, that not only had the private-sector the expertise to do the work but the development could be broken down into reduced-size contracts if necessary.

Clyde_3.jpgMcKnight noted that most of the federation’s time was being taken up with problems directly resulting from government involvement in areas that could and should be handled by private enterprise.

In July 1979 Ministry of Works forces were authorised to place about 10,000 cubic metres of concrete in the Clutha River diversion channel. This move was at odds with an assurance from Works Minister Young 15 months earlier that no concrete would be poured in the diversion channel until Cabinet had made a decision on the division of construction work between state and private forces.

The following month saw unprecedented scenes at the Contractors’ Federation annual conference in Auckland. Angry delegates passed a unanimous vote of no confidence in the ability of Works Minister Young “to direct the execution of work from the public sector”. The vote came after a speech by the minister in which he said contractors would be over-stretched to develop the country’s energy resources, and after 40 minutes of questioning by delegates.

Energy Minister Bill Birch defended Young, after the latter was described as a socialist, but federation president John Feast then accused the Government of being responsible for a growing list of failed contracting companies by spending so much on design and servicing of capital works that “nothing is left for the work itself”.

An Auckland branch remit demanding an immediate answer from the Government to federation submissions on private-enterprise construction of the Clutha scheme was carried

unanimously and was supported by two heavyweight national councillors. Wilkins & Davies head Des Mataga said the federation required and deserved an answer, and Downer general manager

Alex Swainson said a political decision was all that was required to have the work put out to contract.

Post-conference there was a lull in public skirmishing and statements. Then in mid-1980 president Feast said he was more optimistic than he had been for three years about the future of the industry.

He was speaking after he, vice-president Tony Mills, councillors Mataga and Swainson and director Bob McKnight met Energy Minister Birch, Works Minister Young and Associate, Deputy Finance Ministers Derek Quigley and Hugh Templeton, Regional Development Minister Warren Cooper and Secretary for Energy Bill Duncan to discuss federation’s concern at slow progress on the Clutha proposal, plus underspending of the roads budget and continued purchasing of construction plant by several government departments.

Feast said the federation was given an assurance that the Government would try to bring forward construction work for contractors. He said Young had promised “a work storm – probably next year”.

Three months later, in September 1980, director McKnight told members the federation was still waiting for the Government to decide on how involved the private sector would be in the Clutha development and was continuing to press its case.

He admitted many small to medium contractors were questioning what benefit there was for them in the federation concentrating on Clutha at a time when the volume of construction work everywhere was at an all-time low. But he argued that if many large and medium companies become involved in Clutha, that would make other work available for smaller companies.

Clyde_4.jpgMcKnight said the federation had not just concentrated on Clutha but was maintaining continuous pressure for government departments to reduce their holdings of civil-engineering plant.

On December 23, 1980, the federation received the best possible Christmas gift when Works Minister Young announced that Cabinet had decided contractors would build the Clyde Dam and Ministry of Works and Ministry of Energy staff would construct the Clyde powerhouse. Young said the Luggate Dam, which had the same commissioning date as the Clyde project, would also be put out to contract.

Federation president Mills (who had begun his career with the Ministry of Works) said he welcomed the opportunity for the construction industry to demonstrate its capabilities in a project of such major national importance. He hoped it would be an example of “New Zealand Inc”, with private and state forces working side by side for the good of the nation.

However, the NZ Workers’ Union described the decision as “impractical” and complained that less than three months earlier it had been assured public forces would be building the Clyde Dam – evidence that the federation was correct in its strategy of driving its aggressive lobbying campaign right down to the wire.

At the federation’s 1981 conference in Hastings, president Mills described the Clutha decision as “a landmark in our quest to reduce the role of the Ministry of Works and Development as the country’s largest construction agency”.

He said the successful outcome of the federation’s sustained lobbying was one of the greatest achievements in the organisation’s 37-year history because the result embodied so many of federation’s principles and policies.

The federation’s success had gilt-edged spinoffs: Works Minister Bill Young promised more government work for contractors, including Think Big projects in Taranaki, the Aramoana smelter, and the Ohaki geothermal power project.

By early 1982 several contractors were busy at the Clyde Dam site on preparatory work. J W Connolly of Cromwell was constructing a 20-metre tunnel near the dam’s eventual crest; Downer was erecting the main concrete batching plant; Wilkins & Davies was close to completing its second excavation contract, having formed a number of platforms and access roads; and Baker Construction and Cooper were operating their heavy earthmoving plant.

In April 1982 the Clyde Dam construction contract was awarded to a joint venture of W Williamson & Co of Christchurch and Ed Zublin AG of Stuttgart, West Germany (see separate report). It was the dawn of a new era that would eventually see private companies replacing the Ministry of Works and Development and local authorities as the builders of public infrastructure. 

Successful firm refused to join the federation
What the Clyde Dam work entailed

Contractor Vol.32  No.9  October 2008
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