$1.8m road contract let without tender after $500,000 gift

Hastings District Council has let a $1.8 million road-building contract without competitive tender after receiving a $500,000 "donation" from a company.

A councillor who opposed the deal – in which Higgins was given naming rights for a road – said he was surprised at the way the contract was let. "It may well be that the Higgins price will be a good price, but now we'll never know," councillor Wayne Bradshaw said.

The $1.8m contract is to build roads, football fields and netball courts as part of a $56m regional sports park.

Hastings Mayor and Hawke's Bay Regional Sports Park Trust chairman Lawrence Yule confirmed yesterday that the promise of $500,000 cash led the council to give the contract to Higgins without going through a tender process.

The council had approached the roading company for the donation early this year, Mr Yule said. "They came back and advised they would give $250,000 unconditionally and a further $250,000 if they did the physical work."

The sports park – for which ratepayers are contributing $18m – has faced significant fundraising problems.

Mr Bradshaw said he was "surprised" when a motion he put to the council this week that all of the trust's major works, including the roading contract, be put out to tender was voted down. The only significant money the trust had to spend had come from ratepayers.

Mr Yule was convinced Higgins' price for the work was "rock bottom" and therefore a "win-win" for the community. However, for transparency's sake, the contract would be reviewed by the council's engineering staff and the council could get out of the deal if it proved to be anything other than "absolutely competitive".

He understood people's concerns, saying it was an "unusual deal, on a project that had been highly controversial". Added to that was the difficulty the trust had had raising sponsorship.

Audit New Zealand had advised the council that although it did not have an obligation to tender for projects, it was required to be able to prove it had "delivered best value".

Higgins could not be reached for comment yesterday.

Hawke's Bay Chamber of Commerce chief executive Murray Douglas said his organisation had concerns about the deal, but would not comment until it had received council papers relating to it.

Nick Miller, the general manager of competing road building company Fulton Hogan, said he had no objection to projects being awarded without tender "provided the client can demonstrate transparency and value for money through the procurement process".

- © Fairfax NZ News