Winnipeg Free Press Newspaper Archives Nov 5 1971, Page 4

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Winnipeg Free Press (Newspaper) - November 5, 1971, Winnipeg, ManitobaWinnipeg free press Friday november 5, 1971 19% fee for being own contractor wrong Campaign the turnkey contract for the Large Kiver sawmills company Sawmill at the Churchill Forest industries Complex came under Sharp criticism thursday at the inquiry into the forestry com plex. Commissioner Murray s. Donnelly questioned what he said seemed to be a Case of the owner of a project paying him self a 19 per cent fee for being his own contractor. The Issue of fees arose during questioning of Rex e. Grose former chairman and Genera manager of the Manitoba development fund before the com Mission of inquiry into the million Churchill Forest Indus tries Complex which was placed in receivership Jan. Or. Was being questioned about the turnkey contract of september 1968 be tween River sawmills company and Blue construction co. Of the United states. Or. Grose correction in Tom boys and of november 5th Ontario Mclntosh apples Canada commercial read 4 quart Basket 99c should have r Ead 89c was general manager of the fund now the Manitoba development corporation from 1958 until 1966 when he became full time chairman of the fund. He resigned March 31, 1970. Be tween 1958 and about 1966 he also served As Deputy minister of Industry and Commerce and Deputy minister of the Manitoba development authority a turnkey contractor is one hired to manage and supervise All phases of a project and to turn Over to the owner a completed project. Or. Grose testified it was fair to say the. American pack River lumber co. Wanted Blue construction co. To build the River sawmills company Mill. He said there was no question hat pack River lumber created True construction co. The inquiry also was told 31ue construction co. Was. Not registered in Manitoba and thus could not operate Here. It was said the contract was for million with Blue construction co. To get a 19 per cent fee on the total Cost. Or. Donnelly said it appeared Blue construction co. Was a Shell. He said Farmers Erec tors Ltd. Actually did the work on the Large Sawmill at the Pas. He said Blue construction co. Was a Shell in the Parent company group and took a percentage for getting the turnkey contract. The inquiry consists of c. Rhodes Smith chairman re tired chief Justice of the Mani Toba court of Appeal Leon Mit Chell chairman of the Manitoba municipal Board and or. Don Nelly Provost of University col lege University of Manitoba decision Grose or. Mitchell asked or. Grose a fumbles discount department door busters i great value rapt at of a sellout boys Sample ind sub Winter jackets. Terrific assortment of styles colors fabrics. Broken sizes 8-18. Limit 2 per Cus Tomer. Only mrss coca Fibre door Mats Only now that wet weather is Here put one at every door popular at. Shop Early save easy on Speed starch Reg. .77 Only makes Breeze out of ironing clothes stay clean longer Stock up at this Low Price j save 43c v at Rowan 99 Reg. 1.42 Only big 46 of size of lick did Aero Wax for Beautiful floors. Shop Earty for this great buy. Specials in effect while quantities last at All 3 gambles sores. We re serve the right to limit quantities. Whether he had Ever inquired about Why a 19 per cent fee was paid to Blue construction co. For overhead and profit. Or. Grose said Here the fund relied on its outside consultant Arthur d. Little inc., of Cam Bridge massachusetts.1 or. Mitchell then asked him about an Arthur d. Little inc. Report suggesting 15 per cent was reasonable for such fees. I can t said or. Grose. What overhead would Blue construction co. Have out of the 19 per cent and what employees did the company have or. Grose was asked. He said he really did t know. Or. Mitchell asked about Farmers erectors Ltd. And the Pas foundation and excavation co. Ltd. Having overhead expenses properly chargeable by them but not included in the 19 per cent to Blue construction co. I really Don t re plied or. Grose. Or. Mitchell said that if Blue construction co. Did the turn key work it would get 19 per cent of the total Cost and not 19 per cent on top of 19 per cent. The former chairman and general manager of the Mani Toba development fund testified thursday that there was no question that the wrong Deci Sion was made in 1968 to have the fund s consultant paid by the firm the consultant was to be checking on. Rex e. Grose former chair Man and general manager of the fund now the Manitoba development told the commission of inquiry into the million Churchill Forest industries Complex the wrong decision had been taken. Questions of possible conflict of interest arose during or. Grose s ninth Day of testimony. They concerned a clause in the master finance agreement be tween the development fund and the River sawmills com Pany one of the four Compa Nies in the forestry Complex placed in receivership Jan. 8, the clause provided for the fund s consultant in the forestry Complex Arthur do Little inc. Of Cambridge Massachusetts to be engaged by River saw Mills company for the purpose of certifying equity funds put but he said if others carried changes for overhead expenses then 19 per cent could be charged on that overhead. And he said that did not touch on the profit of the other companies or. Grose said he knew Farmers erectors Ltd was on the site at the Pas and that if the company had overhead expenses that was its business. Or. Mitchell asked or. Grose whether it would be proper Lor a Lender to have some concern regarding contracts and what flows from them. Was the reply. He asked or. Grose it be would agree such concern would be a legitimate concern of a prudent Lender. Said or. Grose. Then or. Mitchell asked or. Grose what the development fund had done to protect itself regarding this situation. We relied of Arthur d. Little said or. Grose. Or. Grose also was questioned about what was said was a change in the size of the River sawmills company build ing. It was said the contract called for about a Square foot building while the finished Structure was about Square feet. Or. Grose said it seemed to him the certifying agent Arthur d. Little inc with Access to Plant information should have reported that the four companies in the forestry Complex which were placed in receivership Are Churchill Forest industries Manitoba Ltd., River into the project were properly expended or allocated before further advances were to be authorized. Or. Grose testified the ques Tion of conflict of interest had Arisen and that he had Dis cussed it with an official of the consulting firm. He said he was told there was a precedent for such a procedure. He testified he had Confidence in the consulting firm being Able to protect the fund s inter est the system was built into by pcs Low key rapid City Man. Staff the quiet Low key Campaign being waged by the progressive conservatives in Minnedosa s nov. 16 by election appears to Puzzle Many residents and Visi tors. Apart from a Large non poli tical political birthday party staged in Minnedosa last Fri Day the conservative brass have been conspicuously absent. David Blake conservative candidate in the by election and a Minnedosa Bank manager apparently has been left to run on his own with Little moral or vocal support. The two opposing leaders premiered Schreyer of the new democratic party and Izzy Asper of the Liberal party were questioned Here thursday about the conservative Campaign. Both leaders took time to consider the question before answering. Or. Asper said i under stand that they the conserva Tives Are just planning one big meeting. We the Liberal party and the nip May have made a . Aid program reprieved continued later contracts he said he said if he had it to do Over again he would not do it that Way. He said there was no question it had been the wrong decision. However it was indicated procedure might have its problems regarding proceedings of the inquiry. The inquiry s chief counsel David Bowman told the inquiry Arthur d. Little inc. Officials have indicated that client consultant relationships might keep them from commenting on questions unless client approval is Given. Commissioner Leon Mitchell asked or. Grose whether the purpose of the arrangement regarding Arthur d. Little inc. Was simply to have the consult ing firm pay project Bills itself rather than have them handled by the fund. Replied or. Grose. He said there had been prob lems in dealing with the in voices Bills regarding Chur chill Forest industries Mani Toba Ltd. And said it seemed to make More sense if Arthur d. Little inc. Dealt directly with the company. Or. Grose testified he was trying to facilitate an adminis mistake by holding Public meet Ings. The people just Aren t coming out to the meetings Al though the weather May be a Premier Schreyer on the other hand appeared pleased at turnouts at nip Public meet Ings. He Felt the conservatives were Short changing the min Nedosa. Constituents. He said of the conservatives they re playing cute and hop ing to quietly slip into the seat he also said Piyak Sidney Spivak the opposition Leader just does t want to show his face in the constituency too Asper. Would kill estate tax continued the White House promptly denounced the spending level voted by the committee As inadequate. We Are not satisfied with that said White House press Secretary Ronald l. 2iegler. We Don t feel it is sufficient to meet the essential requirements of the president s or. Ziegler said president Nixon Hopes the Senate will restore the amount needed to maintain a coordinated foreign assistance however or. Ziegler hedged when asked to comment on another step taken by the com Mittee to split the Aid pro Gram into separate economic Aid and military Aid Bills. For the past several Days the White House has been coun seling against any piecemeal approach to foreign Aid. But the committee did just that by approving a billion for eco nomic and humanitarian Assis Tance and billion for Mili tary assistance. The Bills contain several policy restrictions strongly opposed by the administration which the committee had inserted in the Bill killed last week. They include a Flat ceiling of million on assistance to Cam Bodia. Another restriction would impose a six month deadline for withdrawal of All . Forces from Vietnam subject to the release of . War prisoners. Sen. J. William Fulbright the com Mittee chairman said he hoped to Call the two Bills up for Senate action Early next week. He said their Outlook in the Senate was he declined to say whether he would support them. Fulbright left the infer ence that he would oppose both Bills unless he can persuade the Senate to adopt amendments that would Cut their spending authority still further. Sen. Fulbright was repeatedly outvoted by administration sup porters on the committee who succeeded in adding Mil lion to the Flat billion pro Gram sen. Fulbright had favored. But the administration backers were Defeated in an Effort to increase the program to billion. I m very sen. Fulbright told reporters in reference to the increases voted by the committee. However another foreign Aid critic on the committee sen. Frank Church Democrat said he could support the two Bills. I can support them because we have divided the program and the Senate can work its will on both sen Church told reporters. They also have been substantially reduced and our report will make Clear that there is to be a new Era in foreign Aid. The old one was a sugar in a statement of policy attached As a preamble to each Bill the foreign relations com Mittee said the legislation was an interim step intended to continue the program Only through june 30, in contrast to the tradition of extending it for two years. In addition the. Policy state ment said electronics show gain new York shipments of electronic components by . Manufacturers grew from billion in 1960 to billion by the end of the decade. Is Phil Chor my Wynn Lipaj Supply building materials Centre t plumbing expert and if plumbing it a problem Phil will have a solution. Building materials Centra Portage a nut Uil til of pols Park. Loti Olitt parking. Opt n . To . Dally thursday and Friday til . Phone 775-0211 Mills. Company m. P. Indus trial Mills Ltd., and James Ber Tram and son Canada Ltd. Tractive matter. But he said he was disturbed to learn on thursday that client company relationships might now affect Arthur d. Little inc. The three member commis Sion of inquiry consists of c. Rhodes Smith chairman re tired chief Justice of the Mani Toba court of Appeal Murray s. Donnelly Provost of univer sity College University of Manitoba and or. Mitchell chair the inquiry is delving into All Man of the Manitoba municipal aspects of the forestry Complex Board. Premier outdraw Asper continued Cusing him and the conserva Tives of being incapable of understanding farm problems. Did t know lies had farms in River he told the rapid City audience the Premier has proposed that the Federal government implement a program to stabilize the Western Grain Economy by injecting into it million from the Federal Treasury and raising another million through consumer pricing poli also held the previous a hotel room writing a speech for his rapid City appearance. The absence of the two men did not appear to upset Hamio daily routine. There is really Little to be won or lost in the Minnedosa by election. The nip govern ment can increase its majority in the legislature by one but cannot lose a seat the progressive conservatives can re Tain their 12 year grip on the constituency but can come no closer to forming the govern ment and the liberals can in crease their influence Only As much As a party with four sit Ting members can do. The constituency itself looks somewhat like a profile of pin Neochio plumped Down West of Lake Manitoba and with min Nedosa close to dead Centre. It embraces Square Miles voters. It is 60 Miles Long and 48 Miles across at its widest Point or. Screyer is Here on a four Day tour of the constituency in support of nip candidate Emil Sheh bom an Erickson area Dairy Farmer. His ploy so far has been to de fend his government s policies in regard to Rural Manitoba and to lash out As progressive Coa set Stire Leader Sidney spi Vak. The Premier has mentioned or. Asper and the liberals j Osly once and Thea in answer to 2 from a oember of is and Jeftie in Erk Esow. I or. Sci Breyer s two speeches Fol i its Eri Dysas and City f sew Daje saturday Lave bees Tess Al la baft i or. Asper s appearance is eases in is Sty Tea Artlay assist was record Rena stems sea pcs iss St tee Weet. Tor is Ossa feel to aes. He conservative government and or. Spivak personally be he was minister of Industry and Commerce at the time responsible for the Fis-1 Cal disaster of Churchill Forest industries the financial problems of the m. F. Lord Sel Ark which he said was Over capitalized by the Manitoba development fund from the Day the first rivet was fas a number of newsmen cover my the by election Bave observed that both the style and tote specifics Are similar to those used by the Premier last Spring in the Ste. Rose and St vital Byrele Eikens. Or. Schreyer leaves the con Sajta Ercy saturday sight Bat fee leaves he was to a of age. He also suggested As a second step tax cuts for people Over 65. An initial for single people and for married couples would be tax free or. Asper also proposed the abolition of Long distance Tele phone charges within Manitoba. He said the Long distance charges created an economic imbalance that discouraged Industry from developing in North Ern and Rural areas of Mani Toba. Or. Asper told of an unnamed municipality that had to provide a yearly tax con cession to a newly settled Industry to offset Long distance Telephone charges. He proposed partially to off set the loss of Long distance Call revenues with a Flat 50-cent additional assessment on each Telephone in the province. Or. Asper said the Federal new democratic and progressive conservative parties used blackmail and used the West Ern Canadian Farmer As a political football in their Success Ful bit to quash the Federal government s Grain stabilization Bill. He said that although the Grain stabilization bin was not a proper election Issue in tie by election he was forced to discuss it because the nip and conservatives had injected the Issue into the by election. Or. Asper referred to farm ers in the Erickson area to illustrate his Point on the Grain stabilization Bill. Under the Grain stabilization Bill these Farmers would have received an unconditional pay ment of about but under the temporary wheat reserves act they will receive Only the Federal government had hoped to scrap the temporary wheat reserves act in favor of the Grain stabilization Bill or. Asper said the Grain stabilization Bill which he sup ports in principle needed much revision. However he said be cause this year s Grant was unconditional necessary revisions could have been made in the i coming year. San Francisco it s not As Steep As you think new up air fare from Winnipeg 30 Day round trip Economy. Good most Days. La. Winnipeg . Arr. San fran. . Return la. San fran. -1050a.m. Arr. Winnipeg . Only on up air a free Holiday passport for exciting savings in san Francisco. See your up air travel agent. Tales at or ase3y after ibs Sjoe Csc

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