Property editor of the NZ Herald

China option to speed infrastructure

Building basic infrastructure - roading, wastewater, drainage - can hold up construction of residential housing developments but the new NZ Chinese Property Development Society may be able to help.
Building basic infrastructure - roading, wastewater, drainage - can hold up construction of residential housing developments but the new NZ Chinese Property Development Society may be able to help.

Local government's infrastructure-building monopoly could be removed and Chinese contractors could potentially take the lead.

Prime Minister John Key has signalled that direct Chinese investment in Auckland, particularly on crucial infrastructure, could help ease the housing crisis. His comments come after the recent formation of the NZ Chinese Property Development Society to further its interests here.

Although Key did not expressly say, any change could remove Auckland Council-controlled organisations' monopolies; for example, Auckland Transport on roads and Watercare Services for fresh water and wastewater.

Key revealed more this week, following a meeting last weekend. "I was at the Chinese Chamber of Commerce on Saturday just giving a speech and a guy got up and said, 'Look, I'm from China Construction. We want to build some horizontal infrastructure. We've been trying to do that in Penlink' - that's the big roading project up north at Whangaparaoa - 'and we're interested in doing it in residential construction'," Key said, referring to a question from China Construction NZ managing director Timothy Yang who asked about the chance for Chinese companies to be involved in building horizontal infrastructure, which is drains, water pipes, etc.

"And the point I was making was I'm now getting quite a few developers saying that sort of thing to me," Key said.

"So at the moment, they can build the above-ground stuff for housing. They can't build the potentially water, wastewater, roading, those other networks and there is an argument to say that what should happen is that a developer, as long as they meet the standards, should be allowed to build all that infrastructure, potentially, under the auspices of an urban development authority, so you'd get containment of that particular area, and potentially some financial way of the developer then recouping the costs," Key said this week.

Asked if legislation would need to be changed, Key agreed: "You would need to."

Nick Smith, Minister of Building and Housing, said: "I am working on generic models for an urban development authority, based on overseas experience in Australia, UK and US.

"These may result in different ways of providing and funding infrastructure."

Auckland's Chinese developers have already banded together to form a new entity, seen as potentially part of the housing crisis solution.

The NZ Chinese Property Development Society, with 15 founder members and more than 50 individual and company members, says it is "the first official non-profit organisation founded by Chinese people in New Zealand", specialising in the real estate sector.

It wants to unite developers, building material supplies and business partners from related industries to work together "accelerating the development of New Zealand's real estate, assisting government management, implementing government policies and regulations, reflecting members and companies' demands".

The group's website features a picture of Key with society chairman Ni Ganzhong. Key flagged the potential for a major housing roadblock - infrastructure creation - to be unlocked by the private sector, possibly Chinese.

Members pay $4000 annually for a top platinum status - benefits appear only in Mandarin on the website - $3000 for a gold membership and $2000 for silver and is headquartered in Mahuhu Crescent, Parnell.

Key's address at the Pullman Hotel in Auckland was on new ways of paying for crucial infrastructure.

"If Auckland is going to grow at a consistently faster rate than it historically has, it needs to build the infrastructure to match that more ambitious growth rate," Key told the lunch.

"It can't have the lead times that it's historically had. If you look around the world, urban development authorities have been used quite successfully in Australia and [elsewhere] to support faster infrastructure in a more contained way. We've got to do a bit more creative thinking."

Members are named and described by the society as:

• NZLC, developing here for more than 10 years which has become one of the first Chinese high-density apartment building developers.

• Oakland Development, a residential contractor from Remuera.

• Mex enterprises, established two years ago and working on development and residential project planning.

• Nest Nobilo, established by Qinghui, mainly engaged in building, land development, division, foundation excavation, foundation construction and a series of housing construction projects.

• Winbond Construction with hundreds of real estate developments since it was established in 2009.

• Ivest Investment Partners Group, established by Sky Cai, an umbrella company for a number of interests in New Zealand real estate, construction and import/export.

• XCJ Group (NZ), directed by Ruisong Yang, and based in Carbine Rd, Mt Wellington.

The society held a fund-raising dinner in February at the Grand Park Chinese Seafood Restaurant where it said government officials and representatives of New Zealand's real estate sector attended.

Fu Wah chairwoman Madam Chan Lawai.
Fu Wah chairwoman Madam Chan Lawai.

From overseas, China is making a big push into the real estate sector here.

China Construction, working on Penlink, is one of the world's biggest construction businesses. In Auckland, it has begun building a $130million project and has now bid for a $200 million building.

China State Construction Engineering Corporation (CSCEC) is working with New Zealand's second biggest builder, Hawkins Construction, building the new St James Suites apartment and retail project on Queen St alongside the historic St James Theatre.

Now, it has been revealed the business also wants to build the new five-star $200 million Park Hyatt at the Wynyard Quarter on the waterfront for Hong Kong investment.

Development business Fu Wah, joining for a second time with Hawkins to bid for that work, launched by Prime Minister John Key in March at a sod-turning ceremony also attended by Fu Wah's chairwoman, Madam Chan Lawai.

CSCEC has an annual construction turnover of around $100 billion, is reportedly the world's second biggest builder.

The company announced its St James work like this: "China State Construction Engineering Corporation Ltd (CSCEC) has recently signed the general contracting project of St James Suites in New Zealand, with the contract value of $130 million, equivalent to 580 million yuan. Located in Auckland City of New Zealand, the project has the total building area of 37,000sq m and the height of 122m, which will provide more than 300 apartments, 200 parking places and supporting supermarkets upon completion. (from CSCEC 8th Bureau)"

- NZ Herald

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