How will the sector emerge, post-pandemic? Photo / Jason Oxenham
How will the sector emerge, post-pandemic? Photo / Jason Oxenham
A new post-pandemic group has been formed for the multibillion-dollar infrastructure sector to gear up after the coronavirus level 4 alert ends.
Infrastructure Minister Shane Jones and Economic Development and Transport Minister Phil Twyford announced the formation of the Infrastructure Industry Reference Group.
That will be headed by Mark Binns,Crown Infrastructure Partners chairman, ex-Fletcher Construction chief, ex-Meridian Energy chief executive and a director of Metlifecare.
The Government has asked the new group to find $10 million-plus infrastructure projects ready to start, to reduce the economic pain from the Covid-19 pandemic, Jones and Twyford announced.
The group will put forward private- and public-sector projects that are shovel-ready or likely to be within six months, the ministers said.
Chris Haines, a director of cost consultant and quantity surveying business Rider Levett Bucknall's Auckland office, backed the announcement of the new group, indicating it could soften the blow dealt to the sector.
"The Government seems to have a sensible plan to seek to build out of the downturn more so than simply bailing the sector out which is good for the industry in the medium term. Significant subsidies and concessions will still be needed in the short term, particularly if the lockdown continues much beyond the initial four weeks," Haines predicted.
Chris Haines backs the new group's formation. Photo / supplied
Many construction business would struggle to keep staff who had to remain idle for the significant lockdown duration, Haines said.
But Brett Russell, managing director of the giant Dominion Constructors, questioned what government help the wider construction sector would get.
"This needs more of a vertical [construction] twinge to it," he said, adding that many businesses would struggle once the lockdown ended.
"The vertical sector has so many more trades," he said, citing specialists in the air conditioning and plaster board areas alone. "Horizontal has fewer trades so this move won't help as many people."
Jones said he could not name any specific projects for the new group but said these would be "transformational and absorb job seekers" and were in addition to the Government's $12 billion New Zealand Upgrade Programme and Provincial Growth Fund infrastructure investments.
NeedToKnow3
The Government will decide what could be funded, contracted and ready to go as soon as the construction workforce was able to return to work, Jones said.
A new pipeline of infrastructure projects from across the country would be collated, ready to begin as soon as New Zealanders were able to move around freely and return to work.
"The types of projects the Government would consider funding include water, transport, clean energy and buildings. They would also have a public or regional benefit, create jobs and be able to get under way in short order," Twyford said.
Group members are NZ Transport Agency chairman Sir Brian Roche, KiwiRail chief executive Greg Miller and Infrastructure Commission chairman Alan Bollard.
A member of the Construction Industry Accord will also join the group and the recently established Infrastructure Commission will also provide advice and expertise, the ministers said.
"While the economic effect of Covid-19 is yet to be fully understood, we know that we have an opportunity to move our country into action mode and the Government does not wish to see red tape stymie our eventual recovery," Jones said.
"The reference group will be seeking out larger projects, those with a value of over $10m, which would have an immediate stimulatory effect on the construction industry, its workforce and the economy," he said.
Mark Binns heads the new group. Photo / Richard Robinson
Smaller projects might be considered if they would have a direct and immediate benefit to the regional economies and communities.
Information about the work of the Infrastructure Industry Reference Group and the project criteria is on the Crown Infrastructure Partners website today.
