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Telstra Saturn Contracting Staff Made Redundant

MEDIA STATEMENT TUESDAY 30th January 2001

Released by: Graeme Craig Managing Director, Pothole People Ltd, Christchurch

CONTRACTING STAFF MADE REDUNDANT ON $200 MILLION TELSTRA SATURN NETWORK CONSTRUCTION IN CHRISTCHURCH

Christchurch Contractor The Pothole People Limited a subcontractor on the $200 Million Telstra Saturn Network Construction in Christchurch have made 9 staff redundant, following a breach of contract by Downer Engineering.

Graeme Craig Managing Director of the Pothole People Limited went public last Friday, stating contracts his company had signed worth $10 MILLION to provide trenching and associated works with Telstra Saturn cabling for Christchurch were in breach with Downer Engineering, the head contractor to Telstra Saturn.

He said: "Downers have admitted they are unable to supply the amount of work contracted, which spread over 18 months requiring the Pothole People to dig 100 kilometres of trenching."

The Pothole People's solicitors have confirmed in a letter:Downers Connect Limited have failed to comply with the implied term of the contract in relation to the allocation of work and/or have failed to allocate the level of work represented." further, they confirmed the Pothole People have suffered significant detriment as a result of their reliance upon the implied term of the contract and/or representations made. This includes, but is not limited to, the very extensive costs associated with ensuring that the Pothole People had resources ready to carry out the work which they believed was forthcoming.

Graeme Craig said: "What is really disturbing is both Downer and Telstra Saturn simply fail to, or do not want to understand the guarantee these contracts should have provided our company."

As a consequence of this the Pothole People served notice to Downer Engineering for breaches of both contracts.

The Pothole People requested a meeting last week with Downer Engineering and Telstra Saturn to discuss the matter, and presented claims for cost of damages related to the non performance of the contracts.

Downer Engineering and Telstra Saturn were also advised that staff would be made redundant if the issues could not be resolved immediately.

Graeme Craig said: "Downer Engineering responded with an offer to negotiate however this was rejected because the figure they offered to negotiate on would not even cover a fraction of the costs, that we had incurred to date."

When asked about taking the matter through the Courts he said: "Taking this to Court would be too great for our company, and would drag on for years, something we could not afford. We firstly tried to find a resolution through negotiation and at the end of the day Downers and Telstra Saturn expected us to walk out and make people redundant."

As to the immediate future he said: "I have been left with no option but to regrettably make 9 good staff redundant because of the failure of others. In my 29 years in business, this has been the hardest decision I have had to make. All Downers need to do is honour the contracts and put matters right, if they don't they leave me no option but to fight for my companies contractual right in the court of public opinion. The ball is now clearly in Downers and Telstra Saturn's court, I hope they will do the right thing and stop messing with peoples lives in their hunger for extra profits."

....End

For further information:

Graeme Craig Managing Director Pot Hole People Ltd 41 Buchanans Rd Hornby Christchurch Ph 03 342 8822 Mobile 025330 511 AH 03 322 7497 e-mail.. pothole@xtra.co.nz

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