A business group says the process for buying a new ferry with aid money was flawed from the beginning. There is mounting criticism of the Government for getting the 60-seat boat built cheaply in Bangladesh instead of New Zealand.
The Ministry of Foreign Affairs and Trade (MFAT) commissioned the aid-funded ferry for $8 million to replace a vessel linking the New Zealand territory of Tokelau to Samoa with fortnightly sailings.
Kim Campbell, chief executive of the Northern Employers and Manufacturers Association, believes the boat-building industry in New Zealand has not been treated fairly.
"If the Government right from the beginning had said, 'Look, we're going to give this to the cheapest, it's going to be a race to the bottom, it's going to be less than $10 million' - I think pretty much everybody in New Zealand would've rolled up their quills and pens and gone home and done something else.
"But I understand the industry up and down New Zealand spent a lot of time and money trying to participate in a process that was clearly flawed from the beginning."
The Marine Industry Association said the ferry would have cost $14 million to $15 million to build in New Zealand. Director Peter Busfield said the Government did not consider the country's possible economic gain by having it made locally.
Workers in Bangladesh are paid very little, he said, and not enough is known about the boat-building industry there to be sure that the work will be up to standard.
Economic Development Minister Steven Joyce said an overseas bid to build the ferry was almost three times cheaper than anything in New Zealand. He told Radio New Zealand's Summer Report programme on Tuesday that the lowest New Zealand bid was about $23 million.
Mr Joyce said it would be up to the MFAT to make sure there was no cost blow-out.
An architectural drawing of the passenger ferry. Photo: SUPPLIED
Procurement policy 'a joke'
In 2013, the Government said it was changing its procurement policy to create more incentives for New Zealand manufacturers.
The Labour Party's economic development spokesperson, Shane Jones, said the ferry contract shows that the changes were just lip service and a joke.
Mr Jones said the Government has turned it back on a chance to shoe-horn New Zealand boat-builders into work that is close to home in the Pacific.
