Just over a week ago Kiwirail made a quiet announcement. Without any fanfare it had surprisingly extended the number of bidders from 4 to 10 for the $500m of Govt money to build trains for Auckland’s electrified system.
Now that might not have caught attention, except that an independent group of people led by an Aucklander Danise McEvoy had several months before been charged with deciding on who the short-listed bidders would be based on a rigorous process. They had announced a group of four in July.
Yet inexplicably on 3 September, Kiwirail changed the goalposts and when the RFP was announced six more companies were included (several of which I understand had been excluded first time round). The big question is why? And who will gain? I suspect the original four won’t.
In his media release Kiwirail CEO Jim Quinn said the number had been increased because:
“in extending the number to receive the documentation from an initial shortlist of four, we have reflected on the critical importance of securing the best possible whole of life outcome taking account of quality and cost.”
Whatever that means! Despite him claiming otherwise, it’s my understanding that the six new companies did not meet KiwiRail’s original qualifying criteria.
I also understand that at least once of the four companies on the original short list are considering their options given the change in the bidding process. (Update: that view has since been reinforced strongly)
And you’ve got to admit it looks pretty damn odd. Even dodgy. And just who decided to include the six new bidders?
They are:
- CSR Zhuzhou Electric Locomotive Co Ltd The Chinese company was founded in 1936. In 1958, ZELC successfully developed and manufactured the first main line electric locomotive in China. In 1978, it switched to electric locomotives. It calls itself the main development and manufacturing base of electric locomotives in China.
- CSR Nanjing Puzhen Ltd. It build this high speed train in time for China’s Olympics.
- UGL Rail Services Limited – the largest end-to-end rail technology solutions provider/integrator in the Asia Pacific region, and Australia’s largest supplier of outsourced asset management and lifecycle engineering services. Its clients include RailCorp in New South Wales, Yarra Trams in Victoria, MTR Corporation in Hong Kong, Queensland Rail (QR) and Pacific National (PN).
- a consortium of Japan’s Sumitomo Corporation and Nippon Sharyo Ltd,
- China’s LORIC Import & Export Corporation Limited and
- Downer EDI Rail Pty Ltd (which has been producing passenger vehicles for use throughout Australia since the mid-1800s).
Thankfully there’s a blogger in Auckland called Jon C who writes a blog called Aucklandtrains and pays pretty close attention to this stuff. He points to increasing speculation about China chasing infrastructure work in New Zealand, especially after transport minister Steven Joyce and prime minister John Key both visited China recently. The NZ Herald has written about this. So has the ODT. You’d think it would be a bigger story. Not sure why the media haven’t hopped into it more.
Last Thursday, my colleague Darren Hughes asked why:
“At the eleventh hour, KiwiRail decided to increase the short-list of prospective tenderers for a $500 million contract to build Auckland’s electric trains doubling the number of interested parties and lessening the chances of a successful Kiwi bid.
“Steven Joyce’s latest move as Transport Minister has been described by the industry as ‘mind boggling’ especially when figures released today show manufacturing is at a 10 year low.*
“This bizarre move raises questions about the integrity of the tender process, the priorities of this government and the transparent nature of the Minister’s dealings.
You’ve got to ask yourself why the govt (and I bet it wasn’t just Kiwirail) made the decision to include four more players in the Auckland train bid. Isn’t that intereferring in a tender process?
Given this development, just what chance does a substantial NZ build have? Is there a preferred bidder? Is it going to be a largely overseas build? What about Kiwi jobs?
I reckon the government needs to be pretty careful here. The media may not be watching closely (yet) but there’s a bunch of Labour MPs, industry reps and Chambers of Commerce who are, who care about Kiwi jobs and the sustainability of Kiwirail’s mechanical division and our rail engineering capability in this country. Because it’s not just Kiwirail jobs at stake. There’s a wider engineering industry. They’re Kiwi jobs.
And it’s NZ’s reputation in being able to run a credible tender process.
Wow, their all foreigners, what a suprise.
Welcome to the future
A couple of names of the short list arent even builders of suburban electric units. More middlemen who would let the contract to another builder and take a cut.
However they could be builders of the electric overhead infrastructure. Will this mean the entire project of infrastructure to trainsets being bid for and it being a ‘ppp’?
Just as well we have an experienced politician with previous heavy industrial knowledge in Stephen Joyce…. but wait he has only 18 months in politics and came from a radio background with a degree in zoology
Are we looking at a second major disaster in the making , but this time in Auckland
This is so ridiculous. The Government want’s to build trains and has $500 million to build trains, so you would expect the governemtnt to go ahead and build trains. But no instead they spend ages p1ssing around trying to find some third party to do it.
Yep but not just Auckland – for the whole country as the entire NACT line up are a bunch of incompetents.
It’s astounding that they can release a short list and then extend that short list (what was the point in of the short list in the first place?). What’s more mind blowing though, is just how little the media seem to care about what’s happening within our own government. At least when they could show embarrassing moments in the debating chamber, they were there looking for those embarrassing moments.
Mickey mouse, at the very least it is another delay… Motorway projects must always be done as fast as possible and underbudget yet rail gets put on the backburner to try and save a few shekels and then the delays cost even more…
Sigh…
Haven’t they already knocked out New Zealanders from building the trains, with engines imported, same as China?
Germany is doing the Auckland IT computer work – no transparency there or competitive bids. Didn’t Key go there recently?
Zoology? Perfect for the NAct cabinet. There’s wall to wall elephants in there too. Put THEM in the planned zoo enclosure and save the other elephants from the captivity.
German nerds a computing 760, 000
Running our country into the ground
Priceless!
For everything else there’s emigration!
Yeah, NAT the party of NZ business? This is a crying joke. Small NZ business should wake up to the fact that NAT are exporting jobs and NZ currency overseas without a seeming care in the world.
We do need to remember that China takes alot of our agriculture and dairy exports, so there is an element of prid quo pro here. I am interested int he suggestion that 2 of the new companies arent actual manufacturers of trains?
The Super City just appointed SAP without tender, and here we have extended and changed tender criteria, it’s hard to keep up with the standard required.
Quid pro quo you mean?
What for did KiwiRail call an international tender then?
Why release a short list and then extend it?
Wouldn’t have it been easier to just appoint any chinese manufacturer to supply cheap trains without tendering it?
Everything is so ridiculous…..
The recent EDI Downer ‘Waratah’ project in Australia has been a disaster.
What happens when you buy’on the cheap’?
A: Lengthy delays,incomplete build, significant wiring issues…. the list goes on.
Wake up Auckland, you get what you pay for !!!
Don’t forget that the Wellington trains were delivered by Rotem over a year late…
Hillside Workshops lose Trains to China
http://www.stuff.co.nz/business/industries/4456359/KiwiRail-misses-out-on-wagon-bid
More bad news that they are trying to bury under Wong’s body
The NATs want these trains in time for the elections; giving the contract and our tax dollars to Chinese workers instead of kiwi ones just par for the course.
This is to stimulate our economy CV. More jobs and more money spent on infrastructure in NZ.
oh
wait a minute….