The Opposition is questioning the process used after Ritchie Bros. reported the recent auction of 4,000 pieces of equipment and other items from the Muskrat Falls project broke new regional sales records for the company.
The items included “everything needed to run a big project” such as massive generators, big yellow iron, mobile structures, trucks and even small tools.
Ferryland MHA Loyola O’Driscoll wanted to know why a tender or RFP wasn’t issued for the sale of a significant amount of surplus equipment. He says all the bidding fees, buyer’s premiums and seller’s commissions will be sent out of province.
Industry Minister Andrew Parsons responded in the House of Assembly.
Parsons says the reason why Nalcor/Hydro went with Ritchie Bros was to expose the equipment to a much broader range of buyers given their national/international status.
Local Reaction
A local auction house is crying foul after Newfoundland and Labrador Hydro arbitrarily selected a company to liquidate millions of dollars in surplus equipment without any type of bidding process.
Ritchie Bros. reported the recent auction of 4,000 pieces of equipment and other items from the Muskrat Falls project broke regional sales records for the company.
Shawn Roche of Roche’s Auction in St. John’s is disputing government’s contention that Ritchie Brothers has greater national and international reach and would have won had there been a bid process.
Roche says their platforms offer a similar level of exposure. They have gone head-to-head in the past with the national company and won.
Roche says whether it’s Ritche’s or Roache’s or Tommy Toe down the street, anyone using their advertising to the maximum and using similar platforms as Ritchie’s will get the same response. Further, he says neither Hydro nor government even inquired.
Newfoundland and Labrador Hydro says, given the limited size of the local market for the specialized equipment, it was important to market the equipment to a broad buyer base. They say the auction attracted over 4,000 bidders from 44 countries.
Roche says so much for supporting local businesses.
He says well over a million dollars could have been saved by going with them instead of the national firm.
NL Hydro Statement
“The disposal by auction of surplus assets at the Muskrat Falls site was a sole source engagement with Ritchie Brothers. Given the large quantity and specialized nature of some of the equipment, it is important that these assets are marketed to as large a market as possible to ensure the highest possible resale value. Given the limited size of the local market for this equipment, it was important to market the disposal to a broad buyer base. As Ritchie Brothers is the world’s largest industrial auctioneer, and one of the world’s largest sellers of used equipment for the construction, transportation, energy, and other industries, it was therefore determined that they provided the best possible opportunity to reach an extensive national and international client base through its regional auction service. Ritchie Brothers coupled this auction with additional auctions, valued over $20 million, to garner maximum exposure which resulted in over 4,000 bidders from 44 countries.”