Westconnex, Duncan Gay & Leightons, page-7

Ok, I'm going to have a rant - investment case aside (Held/Buy).

I can't imagine Andrew Forrest behaving himself and sticking to the rules the way NRW have, that's for sure.

At some point the NRW board have to decide that they have more to gain than to lose by bring this to the public's attention. I wonder if Duncan Gay even understands the situation at Roy Hill the way investors do (who pore over every nuanced remark in NRW's investor presentation).

How would he know?

Even the West Australian seems afraid of saying anything inflammatory. Mild, gentle hints. Where's the editorial that fairly asks the question: "Does WA want general contractors that act like Samsung have?" with quotes from sub-contractors who have walked away after good work with empty pockets.

Arguably Samsung have cost many jobs at NRW and other contractors: without the massive balance sheet pressure they could have worn the cost of holding more employees through to the prospective 2016 contracts.

Colin Barnett should be reading that editorial, getting a call the next day from NRW's Chair for more information. Then he would make a casual remark at a press conference. This would be noted by Duncan Gay's staff; he'd calmly ask his bureaucrats to make sure there was an understanding by Samsung that the NSW government were observing the situation.

Samsung would be doing the same in Seoul. Why would the NSW Liberals want to be associated with sub-contractors being badly treated? (they would not want to make a contract 15% cheaper because of it, that's for certain).

Am I being unfair to NRW?

The main problem I've got with their treatment of the Samsung situation is this: We read about the approximately $20m win and some other loss from arbitration in the West Australian. No subsequent announcement. That outcome was material and public. The arbitration was adversarial at that point so shareholders should have been kept in the loop.

They seem more concerned with observing protocol that keeping the ship sail-side-up. Fight the good fight in court, but keep it between dashed white lines, old chap.

I'm not sure that the board have the required inner mongrel to deal with bullying behaviour. I don't mean as individuals, I mean as a board.

Wild idea: release an announcement next week saying you have never seen anything like this and that Samsung are bullies and that NRW will fight you all they way and expect support from our politicians. Don't mince your words. Explain clearly that Samsung are fighting arbitration decisions using their balance sheet to attack much smaller Australian companies. Talk freely to journalists and push the line of what the 'confidential' rules say you need to do.

Really, what have any of us got to lose from you doing that?

cheers,
pb