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6 June 2019

Mayors concerned about tender process after ICC decision

Southland District Mayor Gary Tong and Gore District Mayor Tracy Hicks have serious concerns about the tender process to award the contract for processing the region’s recycling following last night’s Invercargill City Council meeting.

Their statement comes after Invercargill City Council Mayor Sir Tim Shadbolt used his casting vote to go against the recommendation from WasteNet to go with the preferred tenderer.

This has been seen as a victory by Southland disAbility Enterprise (SdE) supporters. However, it means the tender process remains live and will be referred back to WasteNet for further discussion. WasteNet’s current contract with SdE will still end in three weeks (30 June).

Mayor Hicks and Mayor Tong say they feel for the staff at SdE who have already been put through a lot of stress and angst by senior management leaking details of the tender process two weeks ago.

Earlier this week Southland and Gore District councils voted unanimously at separate meetings to adopt the recommendation from WasteNet. Councillors also agreed to work together with social agencies to look at ways to support the SdE workers should they be displaced through the next 12 months.

“It was a tough decision but Southland District and Gore District Councils were confident in the advice they were getting from WasteNet on all aspects of the process to date,” Mayor Hicks and Mayor Tong said.

In the interests of being as transparent as possible, the two councils want to release all documents relating to this issue. They are reviewing what can be made public.

WasteNet has offered to roll over SdE’s present service on the same terms and conditions for another 12 months to allow for a transition period. However, to date SdE has rebuffed this offer. Negotiations are continuing.

“Invercargill City Council’s decision last night has not ensured any job security for the people who matter the most in this debate and that is the SdE workers,” the Mayors said.

“WasteNet has worked closely with SdE over the eight years of the contract and has tried very hard to roll it over last year. We negotiated with the management of SdE for more than six months, but they wanted more money for less production,” the Mayors said.

“SdE then asked for an extra $700,000 above its contract of $1.13 million annually to see it through to the end of 2019. Negotiations were stalled while WasteNet offered a loan and financial expertise to assist. While WasteNet never got clarity on SdE’s finances, we did advance a total of $380,000 in monthly payments which would be taken off the exit payment should the contract not be renewed.”

Mayor Tong and Mayor Hicks said SdE management would not budge on its demands and WasteNet could not justify renewing the contract for another eight years without considering other options first. WasteNet agreed to go out to market in November 2018. SdE was encouraged to put in a proposal.

Two proposals were received and an evaluation team made up of staff from each council and an independent expert, with a lawyer and probity auditor advising it, evaluated both tenders on both non-price criteria and then price.

“A preferred tenderer was then identified, with a substantial difference between the two parties,” the mayors said.

The preferred tenderer’s proposal included a new automated material recovery facility, to be built in Invercargill. The use of automated equipment would have provided a safe working environment for employees, reducing health and safety risks created by the current manual sorting process.

At the time of entering into negotiations with the preferred tenderer, there was an $11 million difference in price between the two proposals over the 16-year contract, Mayor Tong and Mayor Hicks said. 

The councils have not been able to make any comment until now because of the need to be fair to all parties involved, and meet the requirements councils are expected to follow in a request for proposal process. 

Gore District Council 29 Bowler Avenue Gore P: 03 209 0330 E: info@goredc.govt.nz