Roading firm defends $500,000 donation

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The company that scored a ratepayer-funded $1.8 million roading contract after giving $500,000 toward the project says it was just trying to be "a good corporate citizen" – and the practice is not unheard of.

Higgins Group chief executive officer Alan Cockrell said those slating the deal with Hastings District Council were "focusing on the wrong things".

Higgins won the contract to build roads and sport facilities at the $56m Hawke's Bay Regional Sports Park, at the same time giving $500,000.

Some councillors and ratepayers had queried how the council knew it was getting the best price when it had not called tenders.

Though Higgins said it regarded the contract and the donation as "two separate transactions", a council paper presented at a public-excluded meeting on January 28 noted that "Higgins Ltd has indicated the sponsorship agreement is contingent on them being awarded the ... road works".

Mr Cockrell said the Higgins family were "trying to be good corporate citizens". While it was unusual for a donation and contract to seem to be tied up together "it's not the first time it's happened".

He said the council asked Higgins for a donation, and when the company suggested $500,000, the council said that sum would gain Higgins naming rights for the park's boulevard.

"It was really two separate transactions. We said it will look a bit silly if we don't build it. It would be odd to have our name on a road built by the opposition. The negotiations went from there."

Mr Cockrell said the two parties had ensured the process was transparent by using independent consultants to review the rates.

"I can see the [opposers'] point but there are checks and balances in place, and will continue to be so."

The Higgins family had "seen an opportunity to put something back into the community that profits all the Bay. We've been in the Bay for 40 years, we have 100 staff there, their families will enjoy the park".

The January report showed that council staff realised there could be some "criticism" over the deal, but were expecting that to come from the local contracting industry "for removing a significant component of work ... from the market".

The decision was passed, with two dissenting votes, giving responsibility for contracting the project out to the park trust, which, the report noted, "is not subject to council's tendering policy". Hastings Mayor Lawrence Yule, as chairman of the trust, did not vote.

Council chief executive Ross McLeod said yesterday he was "absolutely confident the community is getting a good price at the sports park".

Trust chief executive Jock Mackintosh said politicking on the matter would "potentially damage funding" opportunities.

- © Fairfax NZ News