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The Central Otago District Council has awarded the water services maintenance contract to Fulton Hogan for $1.2 million.
The Fulton Hogan tender was selected from four shortlisted tenders.
Council infrastructure services manager Jon Kingsford said Fulton Hogan's tender offered ''an enhanced asset management focus, relationship contracting and increased local resources with a strong customer focus''.
The reduced cost of the contract meant the council could address several deferred projects.
''Our water services team will be working closely with Fulton Hogan to identify opportunities to reduce service request numbers though proactive maintenance now possible as a result of these savings.''
The accepted tender is within the council's budget. A submission will be made to the draft annual plan to adjust the water budgets for 2013-14 to the new rate, with an overall reduction to the draft estimates of $210,000 of ratepayer funding.
The contract is for five years and starts on October 1.