No tender was issued for the auction, confirms N.L. Hydro
A St. John’s auctioneer wants to know why Newfoundland and Labrador Hydro entrusted the sale of equipment used during the construction of Muskrat Falls to a British Columbia auction house without issuing a tender to local companies.
The Oct. 3 auction was handled by Ritchie Bros. Auctions, a publicly traded auction house based in Burnaby.
The auction was full of many high-priced items, including a Mack pump truck that sold for $675,000, a set of shipping containers that sold for $282,500 and several trucks that sold for between $13,000 and $18,000.
Shawn Roche of Roche’s Auctioneering says the auction would have put millions into the pockets of local auction houses but a tender or request for proposal was never issued for the auction. Roche said he has tried to speak with representatives from N.L. Hydro and from Nalcor Energy, which operates the Crown utility.
“I’ve never seen it not happen. I don’t understand. When I called in nobody would return my phone call.… There was no contract, there was no RFP, nothing,” Roche said Tuesday.
Roche said N.L. Hydro would have likely saved a large sum of money — he estimates about $100,000 — by going with a local company.
Auction houses in Newfoundland and Labrador aren’t allowed to charge a buyer’s premium and typically receive eight per cent commission, he said. Roche claims Ritchie Bros. received between nine and 15 per cent commission and charged a buyer’s premium and buyer’s fee.
A representative of Ritchie Bros. Auctions told CBC News they generally don’t publicly release their commission and fees, and noted commissions vary among auction houses.
Additionally, photos on the auction house website show many of the trucks with Nalcor branding still on them. Roche says vehicles usually aren’t auctioned with corporate branding still on them as it provides an opportunity for a person to impersonate a member of the company or hurt the company’s image.
But in a statement to CBC, N.L. Hydro said decals are removed before the vehicles are sold.
N.L. Hydro also confirmed a tender wasn’t issued and said Ritchie Bros. 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.”
According to the statement, the equipment was grouped in with other ongoing auctions, which resulted in more than 4,000 bids from more than 40 countries.
“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,” reads the statement.
“Given the limited size of the local market for this equipment, it was important to market the disposal to a broad buyer base.”
Roche said he hopes tenders will continue to be issued in the future, as he knows auction houses in Newfoundland and Labrador are more than capable of handling larger auctions like the items at Muskrat Falls.