Fran O'Sullivan

A columnist for the NZ Herald

BNZ doing its bit for Christchurch

The BNZ has championed the Enterprise Precinct and Innovation Campus which is part of the planned Innovation Precinct for central Christchurch. Photo / Supplied
The BNZ has championed the Enterprise Precinct and Innovation Campus which is part of the planned Innovation Precinct for central Christchurch. Photo / Supplied

The bank has pitched in to help it get back on its feet, writes Fran O'Sullivan

Ross Campbell says one of the big questions BNZ squared up to after the Canterbury quakes was just how it could help rebuild a devastated city.

Campbell - BNZ's head of infrastructure - says Christchurch has a natural role as the South Island's service centre. Lyttelton Port is the transit point for coal and dairy exports. But the city has longtime been a centre for the electronics industry, with companies like Tait Communications and Dynamic Controls based there.

"Over the years they had built up a pretty significant industry down there," says Campbell. "There were strong links between the companies around technology development, collaboration and staff development, and, between big companies and a cluster of small companies.

"After the earthquake the question that we faced was how can we help the rebuild by giving an area of relative strength for Christchurch a lift-up."

The BNZ actively championed the development of the Enterprise Precinct and Innovation Campus (Epic), targeted to open in October, on the edge of the Red Zone.

The Christchurch City Council provided the land rent-free. The 4000sq m site will have 2600sq m office space. It follows the Silicon Valley model and is expected to stimulate the growth of high innovation SMEs in central Christchurch and help kickstart business in the CBD. Companies such as Left Click, Spore Tools and Cerebral Fix are among the foundation tenants which include BNZ.

BNZ partnered with on-the-ground entrepreneurs to transform the concept into reality by arranging innovative commercial funding. The bulk of project costs will be progressively paid back through rentals and grants; the bank also leveraged its supplier relationships to provide legal support and quantity surveying work.

Insurance issues have introduced complexity into the overall CBD rebuild. But BNZ's head of property finance Peter Thomas explains the bank was able to use the strength of its relationship with AON to help arrange insurance.

But Campbell says there was "little if any movement" on the overall commercial rebuild until the CBD blueprint was released.

"We are seeing quite strong interest from a range of investors looking to rebuild and reenter that marketplace,"says Campbell.

He is particularly impressed at the innovative mechanisms being developed to build resilience into new water supply networks at minimal extra cost.

BNZ is lead bank to Ngai Tahu and is working with it on its Wigram Skies residential development. When complete, the subdivision will be home to around 4000 people and will provide leisure and recreational facilities to Christchurch's south west.

The Government is working towards a major announcement on an irrigation project for the Canterbury rural hinterland expected to boost profits from the agriculture sector.

BNZ has formed an internal irrigation board headed by Guy Ensor. It has two irrigation projects on the go - the Waimakariri Scheme and the Rangitata Diversion Race in Canterbury in respect of storage pond expansion options. "We see irrigation as a major sector of opportunity for New Zealand," says Campbell.

" The challenge is how do we lift that in a sustainable fashion."

Campbell points out the gestation period for irrigation schemes can be anything from 5-10 years.

"Quite frankly, the role for financier only comes at the final stage when they are looking to go from committed feasibility to actual construction, and the debt is obviously a significant part of that."

Campbell says there has been a "sea change" in the financial structuring of irrigation schemes. The easy ones - which were largely funded off individual farmers' own balance sheets - have been done.

The large schemes are being put together on a stronger commercial basis with external investors likely to be involved.

BNZ in Christchurch
* Christchurch City Council's banker
* Lead bank for Ngai Tahu
* Funded upfront development of Epic (Christchurch Hi-Tech hub), targeted to open in October

- NZ Herald

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