Project to keep mistaken grant

Timbersmart, the Auckland company that obtained a government "growth" grant it wasn't entitled to for implementing a message exchange system, will not be asked to repay the $30,000 it has received to date from New Zealand Trade & Enterprise.

Timbersmart, the Auckland company that obtained a government “growth” grant it wasn’t entitled to for implementing a message exchange system, will not be asked to repay the $30,000 it has received to date from New Zealand Trade & Enterprise.

The company will instead be negotiating with NZTE to obtain funding for the messaging development under a different grant category.

“We are convinced it’s a worthwhile project,” says Timbersmart managing director Darryl Nicolson.

Industry NZ, since merged into the new NZTE entity, approved $100,000 for the project two years ago. This was being given out in stages depending on the attainment of milestones, but the grant was justified on the strength of cost savings rather than business growth, says NZTE. Hence the auditor-general, after a regular analysis of recent grants, judged that it did not fall within the guidelines of the grant scheme used.

Retail chain The Warehouse had grants for non-IT developments quashed as a result of the same review.

“It was our mistake,” says an NZTE spokeswoman, “so Timbersmart won’t have to pay back what it’s received.”

Nicolson is unsure the company has received as much as $30,000, but says there will be further negotiation with NZTE anyway.

The development, TimberXchange, aims to reconcile the different reference numbers that timber buyers and sellers use for certain lines of goods. The receiver of the message, usually a buyer, would previously have had to keep a list of equivalent supplier and buyer codes and manually re-key the numbers. TimberXchange can automatically translate the references and otherwise reformat to accommodate the message to the receiver’s system.

The basic system is working but specific links are needed from the users’ systems to TimberXchange, says Nicolson. Timbersmart hoped user fees would pay for this but there has been difficulty getting sufficient customers, particularly sellers, on to the system, since the benefit is a saving of work for the buyer. The seller’s experience is no different, apart from a possible increase in business in the longer term. Buyers, in turn, are sometimes unwilling to enter because they see themselves as facilitating a seller’s participation and hence benefiting others who buy from that seller — their competitors.

A grant to help develop the “ramps on to the bridge”, as Nicolson calls them, would help get the whole system to a critical mass of users.

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