Contractor Claims Contracts Worth $1 M Breached

Major Problems In Christchurch With $200 Million Telstra Saturn Build,
Contractor Claims Their Contracts Worth $10 Million Breached And May Cause Loss Of Jobs

Media Statement Friday 26 January 2001 Released by: Graeme Craig Managing Director, Pothole People Ltd, Christchurch

Major Problems In Christchurch With $200 Million Telstra Saturn Build,Contractor Claims Their Contracts Worth $10 Million Breached And May Cause Loss Of Jobs

Christchurch contractor The Pothole People Ltd is a sub-contractor to Downer Engineering on the $200 million Telstra Saturn network construction in Christchurch.

Downer Engineering are the head contractor to Telstra Saturn.

The Pothole People Ltd have a dispute with Downer Engineering over a breach of contract that may cause a loss of jobs.

Graeme Craig, Managing Director of the Pothole People Ltd said: "Last July his company signed a contract worth $6 million, and a second, in October, worth $4 million to provide trenching, associated with Telstra Saturn cabling for Christchurch."

Graeme Craig said: "Downers have admitted they are unable to supply the amount of work contracted. As a consequence of this, the Pothole People Ltd have accordingly put Downers on notice that they are now in breach of both contracts in relation to the Telstra Saturn cabling project, and are seeking costs and damages related to the non-performance of contracts. Repeated efforts and a meeting this week with representatives of both Downer Engineering and Telstra Saturn regrettably had failed to find a satisfactory resolution."

Late yesterday the shareholders of the company which includes his wife, two sons and daughter made the decision to hold a press conference following a media enquiry last week regarding problems. He said: "This enquiry had led to rumours and had caused unsettlement with our staff and I knew we had to take immediate steps to protect our reputation."

At today's press conference Graeme Craig supported by his family started by reading a letter from their solicitors, which in short he said: " States the contracts are bullet proof."

He explained how the whole issue was about The Pothole People committing themselves to carry out a contract and in turn making a commitment to staff and their families.

He stated: "These responsibilities were taken very seriously and we had simply expected others to do the same. Downer Engineering simply refused to recognize that the Pothole People have a valid live contract. We had tried to negotiate with them and at the end of the day they expected us to walk out and make people redundant and offer us pittance in return.I may be sticking my neck out by going public but if I shut up and take my case to court, we all know what happens then it gets suppressed with no winners."

As to the future Graeme Craig said: "We hope Downer Engineering will put matters right enabling these difficulties to be resolved and to ensure no further problems for the Telstra Saturn network construction in Christchurch.

.End

For further information:

Graeme Craig

Managing Director

Pot Hole People Ltd

41 Buchanans Rd

Hornby

Christchurch

Ph 03 342 8822

Mobile 025330 511

e-mail.. pothole@xtra.co.nz

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