Better long term planning needed for construction sector

Better long term planning needed for construction sector

Media Statement
7 February 2013

"The announcement that Mainzeal has been placed into receivership has taken many in the construction industry by surprise but should not be considered unexpected given New Zealand’s boom-bust construction market, says Stephen Selwood," Chief Executive of New Zealand Council for Infrastructure Development.

"While Mainzeal is facing its own unique set of circumstances as a company there is no doubt that the boom-bust nature of New Zealand's construction market will have been a significant contributing factor to its current situation," Selwood says.

"The sad irony is that the sector is about to enter into a boom cycle, once again, following three years of retrenchment.

"With the Wiri prison now under construction, the ten catalyst projects and the hospital in Christchurch under development and with the slow rebirth of commercial development in Auckland, prospects for the 400 Mainzeal staff and subcontractors look reasonably promising.

"Frustratingly, the emergence of a boom cycle will, once again, create enormous pressure across the industry for human resources and capital equipment. Almost inevitably this will lead to price increases that could have been avoided through better long term planning of New Zealand's major project pipeline.

"The industry has consistently pressed central and local government to work more closely with the sector to develop a long term approach to planning, consenting, and funding public projects.

"We are looking forward to the release by Treasury of the Government's Ten Year Capital Intentions Plan later this year.

"Greater certainty about the project pipeline will incentivise the industry to invest in productive capacity and improve value for money - a potential win win for both the industry, its people, and for the public sector," Selwood says.

ENDS

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