I was struck by the similar comments from Steven Joyce and Jim Quinn, Kiwirail CEO, that we should buy trains off somebody who “does these things for a living”, made in trying to justify the lack of any attempt by Kiwirail to tender for local assembly of the new units for Auckland.
I’m not sure which one was the echo, but what I do know is that if New Zealand doesn’t also do these things for a living then we’ll never get near Australia’s standard. The Aussies have a completely different view about government purchasing, as I learnt from my years on the Industrial Supplies Office management committee in the 1990’s. They believe in Australian jobs for Australian money.
For a project like this in Australia, prospective tenderers would have to submit an Australian Industry Participation plan. It says:
The objective of an AIP Plan is to:
â€¢ demonstrate how you will provide full, fair and reasonable opportunity to Australian industry to supply goods and services to your project; and
â€¢ endeavour to maximise opportunities for Australian industry, especially small and medium sized enterprises (SMEs), to participate in all aspects of the project.
AIP Plans must reflect actual or planned events. This is best done by identifying specific actions that will be undertaken to encourage Australian industry participation.
New Zealand has no such requirement. So the forty-eight Matangi units for Wellington have been designed and built in Korea; Hyundai/Mitsui were “encouraged” to seek New Zealand participation in the $230m contract but there was no requirement for them to do so. New Zealand companies such as Fibreglass Developments and Trimtech have complained that they were given no real opportunity to participate.
That’s why Korea’s standard of living is also rapidly rising, and about to match ours which is steadily declining.
Also contrary to what Joyce and Quinn say, the Australians make sure that their companies are included in any tender and build. Regarding the recent announcement in for 200 new trains in Queensland, Queensland Rail says:
‘Queenslanders will build any new facilities for assembly and maintenance of the new fleet and there will be ongoing roles in construction and through life support for the fleet.
‘We will also support the creation of a competitive, nationally and internationally focused rail support services cluster, centred in Queensland.’
‘The government’s goals with this tender are clear to create jobs for Queenslanders,’ Ms Bligh said.
It’s all too hard for Joyce and Quinn. But New Zealand should be as ambitious as the Aussies to make things – we might even catch up with them.