Infrastructure report: Recovery on track, says CEO

By Alexander Speirs

Alexander Speirs reports on progress on New Zealand's largest infrastructure build -- Christchurch.

As belts are tightened in Canterbury, anchor projects like the Metro sports centre have come under the spotlight.
As belts are tightened in Canterbury, anchor projects like the Metro sports centre have come under the spotlight.

Growing impatience characterised the mood in Christchurch earlier this year, with business leaders and the public growing increasingly frustrated at the lack of progress within the central city.

However, Cera (Canterbury Earthquake Recovery Authority) chief executive Roger Sutton says despite the rhetoric, everything is right on track.

"The Metro Sports facility has slipped maybe six months or so behind schedule, but as far as time -- in broad terms, we're about where we expected to be," he explains. "The big anchor projects now are under way and will start coming out of the ground this year. The worries about the CBD not coming back -- I think those have almost entirely dissipated.

"The Christchurch City council still has lots of hard things to do, they've got financial issues that they're going to have to face up to. That's going to have significant challenges which come with it."

Christchurch City Council -- which is co-funding some anchor projects -- has a potential crisis on its balance sheet.

The council faces a funding deficit projected to be as high as $883 million by 2019, according to a report commissioned by mayor Lianne Dalziel. The final amount required will in a large part come down to the cost of the anchor projects and the continuing infrastructure redevelopment.

As belts continue to be tightened across the region, the anchor projects and the procurement process have come back under the spotlight.

The Convention Centre development drew particular criticism, with only a single interested party vying for the project rights after four of the shortlisted five groups withdrew their applications.

However, Sutton remains confiden the procurement process for the anchor projects is producing the best results for Christchurch.

"We've had competitive bids on most projects we've got so far - there's been a lot of competition," he says. "All of the other projects, we've had a very competitive process with lots of people fighting to be a part of it.

"The Convention Centre is a bigger and more complex project, and we actually want to work with a partner who has real expertise in doing that sort of thing. There actually aren't many who have that level of expertise required to drive a project of this nature."

The Convention Centre will be developed by a consortium formed by Plenary Conventions, Ngai Tahu Property and Christchurch's Carter group. The Crown has committed $284 million to the project, including buying the land for the precinct. The next step will be for the consortium to formally enter into a master planning and development phase, where the group will work with the Crown on the detail of the precinct.

Construction is due to begin next year, with the centre open for business in 2017. The venue will be run by French hospitality giant Accor, which will also be involved in the development.

Minister for Canterbury Earthquake Recovery Gerry Brownlee defends the drawn-out process for selecting the consortium, saying "there is a very good reason for this; we needed to ensure we followed a thorough, fair and considered approach to find the best possible development consortium and operator, and this process is ongoing.

"I'm confident the end result of this work will be a vibrant, world-class Convention Centre Precinct that attracts conference and convention visitors from all over the world, and delivers significant economic benefits for the Canterbury region."

Following the Convention Centre, the last major project left to get under way will be the new Christchurch Stadium -- although the success of the temporary AMI Stadium isn't doing much to force the Government's hand to pick up the pace.

"That stadium is the last anchor project we need to get going," says Sutton.

"At the moment we've done very little work towards it because other projects are a priority. We've had the temporary stadium which is operating extremely well in the interim -- I believe the crowds at Crusaders games have been the highest of any of the New Zealand franchises this winter. I think the stadium is for later, not for now."

Though the major developments have started to turn the corner, there's still a long way to go before the blueprint for the new CBD is close to being realised.

Cera is approaching the end of its initial five-year mandate, after which the special powers granted to the organisation under the Canterbury Earthquake Recovery Act will expire. The Finance and Expenditure Committee has tasked Cera with advising on its proposals for future governance -- an important issue for the city that needs to be addressed sooner rather than later.

"What we've been asked to do is see what Cera will look like going through to when our special powers cease in 2016. We're just continuing to think about what functions and how big Cera needs to be post-2016," explains Sutton.

"The final result need not necessarily be Cera either -- it's a matter of establishing what functions central Government needs to be keeping in Christchurch. We're doing a lot of work on that and we'll continue to work with Government agencies and our minister on what that looks like.

"Come 2016 there will still be big anchor projects that aren't finished. There will be a whole lot of infrastructure that will still be unfinished. We'll be working -- with community organisations -- with people whose lives have been made more difficult after the earthquakes; there are still a number of significant functions we need to do."

Progress is being made on developing that solution, but Sutton doesn't expect preliminary findings will be available for at least six months.

Christchurch is bouncing ahead of New Zealand

4.9 per cent Growth in economic activity in Canterbury region in year to March 2014 (compared to 4.3 per cent in Auckland, 4.1 per cent nationwide)
Source: ANZ Regional Estimates

14870 Net business creation since September 1 2010 (as at March 2014).
Source: IRD

22,559 Number of businesses that have been registered in Canterbury with the IRD since September 1 2010 (as at March 2014).
Source: IRD

7689 Number of IRD registered businesses in Canterbury that have ceased trading since September 1 2010 (as at March 2014).
Source: IRD

9.1 per cent Growth in consumer spending in Canterbury in May 2014 compared to the same month a year prior (compared to 8.7 per cent for NZ.)
Source: Paymark (which processes 75 per cent of all electronic transactions in NZ)

$71.1m Value of commercial building consents in May 2014.
(242 per cent higher than the monthly average in the year prior to September 2010)

3.3 per cent Unemployment rate in Canterbury as at March 2014.
(Compared to 6.2 per cent for NZ)

Roger Sutton: in his own words


Roger Sutton.
I have to work trying to make sure the rest of my organisation is mindful that this is a long event.

Roger Sutton has no idea what he'll do when his contract is up. The Canterbury Earthquake Recovery Act expires in April 2016 and it's not clear what the new governance structure for the rebuild will be.

"I have a five-year contract, and I don't know what I will do at the end of that five-year contract.

"I may still be involved in Christchurch, or I may decide I need a big holiday somewhere.

"Personally it's been difficult trying to get yourself out of the detail - getting away from trying to fix people you know who are living in difficult squalid conditions and stay on the big picture; making sure I keep myself well; staying positive with people who haven't always been happy with things happening down here.

"It is a hard job. It has been busy. It is stressful.

"I try and manage myself; while I work long days I try to keep the weekends to myself. I enjoy the outdoors here - that wellness stuff.

I do actually sit down every week and my PA makes me fill out a table of how many times I actually had proper exercise, how many pages of a novel have I read and how many proper interactions with friends have I had.

"That's to try to ensure that I am making sure I am doing things that I know are fundamentally important to keeping myself well.

"I have to work trying to make sure the rest of my organisation is mindful that this is a long event.

"I think I've learned lots of lessons, and I'd be happy to share those lessons in another role.

"But I don't know what I want to do next.

"I want a proper holiday. Be a better father, husband and son when I finish here."

* Roger Sutton is the chief executive of the Canterbury Earthquake Recovery Authority (Cera)

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