Christopher Adams

The Business Herald’s markets and banking reporter.

Christchurch: Rebuild expectations differ

The majority of infrastructure consultants and contractors expect quake rebuilding work to rise during the next three years. Photo / Sarah Ivey
The majority of infrastructure consultants and contractors expect quake rebuilding work to rise during the next three years. Photo / Sarah Ivey

Infrastructure investors and contractors have very different expectations about the amount of work that will take place in the sector over the next three years, a survey has found.

Technical services consultancy AECOM's infrastructure construction sentiment survey found 83 per cent of the delivery market, consisting of contractors and consultants, expected a rise in work.

But only 35 per cent of infrastructure investors expected to see more work in the period.

AECOM's New Zealand managing director, Dean Kimpton, said the lower expectations of infrastructure investors may reflect concern about the global economy, the pace of the Christchurch rebuild or uncertainty around the availability of skilled staff.

But he said survey respondents expected a boost in infrastructure investment nationwide in the next three years, with the quake rebuild ensuring most of the investment would be in Christchurch.

"At least $20 billion of new money is expected to flow into Christchurch as a result of insurance payouts and rebuild investment," Kimpton said. "Financiers, local authorities and private investors emphasised [in the survey] the need to encourage more private-sector investment and allocate risks appropriately."

He said financing concerns could be addressed through public private partnerships (PPPs), which were highlighted in the survey as a means of enabling greater access to finance for infrastructure projects.

"Twenty-four per cent of delivery market survey participants expected alliancing to support financing, with 29 per cent indicating that PPPs could open the doors to further funding," he said.

One of the challenges facing the industry was the "inter-related issue" of escalating quake rebuild work, combined with a shortage of skilled workers, he said.

"All subsectors of the industry were concerned about the availability of contractors over the next three years, with 61 per cent of respondents anticipating restrictive shortages," he said.

"Outside of Christchurch, industry participants called for a clearer understanding about which projects the Government would prioritise to allow better planning to overcome these industry challenges."

INFRASTRUCTURE EXPECTATIONS
* 83 per cent of infrastructure consultants and contractors expect more work in the next three years.
* 35 per cent of infrastructure investors expect a lift in work over the same period.
* 61 per cent of respondents anticipate staff shortages as the Christchurch rebuild ramps up.

- NZ Herald

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