Fuel-saver a scam says Hide

By SIMON COLLINS

One of the first business proposals to receive help from the Government's new Investment Ready Scheme has been condemned in Parliament as a scam.

Act MP Rodney Hide said the proposal, a magnetic fuel-saver, was similar to devices the Consumers' Institute, the Australian Automobile Association and the US Federal Trade Commission had found to be "a very old scam and fraudulent."

Consumers' Institute chief executive David Russell said later that a magnetic device fitted to the fuel line outside the engine "just doesn't stack up in terms of science."

"Never yet in my 23 years with the Consumers' Institute have we, in all our testing and all our investigations, found any of these potential fuel-saving devices that actually line up to the claims that are made."

Mr Hide said he did not know why the Economic Development Ministry was wasting money on the device, "because 30 seconds on the net would have warned them off it. I'm afraid we are going to see more of the taxpayers' money down the toilet."

The Investment Ready Scheme has been contracted out for $1.3 million to the Economic Development Association - representing 44 local development groups such as Enterprise Waitakere - and to venture capital consultants I Grow NZ.

The scheme, launched on July 4, provides independent assessment of ideas and "deal-making" help..

The I Grow principal who assessed the fuel-saving proposal, Ralph Shale, found that "securing capital for this project will be very difficult without some form of endorsement from a 'trade' organisation or through evidence of consumer demand."

He recommended that the applicant, Pukekohe inventor Nathan Balasingham, should approach the Automobile Association, Toyota, vehicle testing stations, the Motor Trade Association or Pit Stop.

But his final recommendation was: "A suitable marketing and distribution partner can provide all additional resource requirements."

Mr Shale said last night that he did not have a technical background and there was no technical expertise in the scheme. He has 10 years' experience in corporate and investment banking.

He spent a day on Mr Balasingham's project but was not paid. "We get paid if we are successful in raising capital for people. We are not getting paid for pushing people into that service."

Mr Balasingham, a former NZ research and development manager for Bayer-BASF, said he had tested the device himself with Pukekohe's Brougham Buses, United Transport trucks and rally driver Possum Bourne, and found fuel savings of at least 10 per cent in all cases.

In a testimonial, Bourne said: "We have fitted the Kynetik Power Pac to a number of vehicles ranging from older, high-mileage cars to high-performance turbos to heavy linehaul trucks.

"In every case there has been a fuel saving of around 10 per cent."

Bourne was in Australia last night and did not return calls from the Herald.

A spokesman for Economic Development Minister Jim Anderton said it was impracticable for the scheme to have technical experts on everything.