May 20, 1999
(Works, Services and Transportation)

The following statement was issued today by Lloyd Matthews, Acting Minister of Works, Services and Transportation. It was also read in the House of Assembly:

I wish to advise honourable members that I will introduce, for first reading today, a bill to amend the Public Tender Act. The proposed amendment will have the effect of exempting, from the Public Tender Act, the calling of tenders for voice telephone services including both local and long distance.

This is a necessary and important amendment to the Public Tender Act. It gives the province the same flexibility currently existing in all other jurisdictions as other provinces have not dealt with the issue of tendering or contracting out for telephone services.

Government has held discussions with NewTel Communications, the current provider of these services. As a direct result of these discussions, the province would save approximately $1 million annually on its telephone account. Government has been offered a rate for both long distance and local services that is comparable to and, in many instances, lower than that which many other jurisdictions are currently paying. The proposed rate is less per minute than the rate charged to the Nova Scotia government by MT&T; the per minute rate charged to the New Brunswick government by NBTel and the per minute rate charged to the Prince Edward Island government by Island Tel.

Government has received an exceptionally good and competitive rate for both long distance and local services. The rate for long distance should also be viewed in light of the fact that due to the location of our province on the North American long distance grid, the cost of completing a call is more expensive here. Yet, the rate offered by NewTel is still less than the other Atlantic provinces. The rate for local Centrex service is also reasonable when considering the fact that the Government of Newfoundland and Labrador has less than half the number of local lines as other provinces.

The government has an excellent working relationship with NewTel. As all members know, it is a most reputable company and a good corporate citizen. NewTel employs some 1500 persons with an average payroll of $43,000 per person. This equates to a yearly payroll of $80 million. NewTel Communications is a company that makes a significant contribution to the economy in terms of wages and taxes and it is a significant corporate sponsor of many cultural activities in the province.

The recent merger of the four Atlantic province's telephone companies will have no negative impact on NewTel's local operations. The new company, AtlanticCo, is solely a holding company looking after international affairs. The local operation of NewTel and, for that matter, all other Atlantic telephone companies will remain the same, each keeping their separate identity. It is also worthy of note that the new CEO and CFO of AtlanticCo are from the NewTel organization based in Newfoundland and Labrador.

I trust that this amendment will receive the unanimous support of members on both sides of the House.

1999 05 20         2:30 p.m.