7 May 2008

Something to think about

An interesting Guardian editorial partially says:

Prime Minister Patrick Manning has been vocal in his condemnation of what he has described as construction cartels, groups of businesses in the local market that he suspects may be artificially driving up prices for projects and stifling the supply of raw materials.

But in his haste to open up the market and accomplish the bricks and mortar elements of his Vision 2020, has the PM managed to create new, even more troubling cartels?

The government has quietly signed a memorandum of understanding with Sunway, a Malaysian construction conglomerate to manage and mine Scott's quarry, a premium source of aggregate at a fixed price of $108 per tonne for the life of the five-year contract, with an option to renew for another five years beyond that.

This agreement has been made despite the existence of State-owned National Quarries, an entity that would seem to be in preferred position for the development of a national resource in significant demand.

Sunway is already operating in the country as a contractor building the new Legal Affairs Tower on the corner of Richmond and London Streets.

That contract was signed with a bidder who set a price $67 million higher than the lowest bidder and the company has missed the deadline for completion by nine months so far with no end to the work in sight.

A little something to think about today, huh?