$1.3m Bay boost likely as firm beats foreign steel-tender rivals

Napier

Hawke's Bay's economy stands to benefit to the tune of $1.3 million thanks to a contract win by Napier steel-bridge specialist Eastbridge.

The firm will supply 1300 tonnes of steel for the 200m-long, 40m-high Karapiro Viaduct, the largest of eight bridges on the Cambridge section of the NZ Transport Agency's Waikato Expressway project.

Eastbridge managing director Bruce Mellsop said the firm had to fend off competition, including from several overseas bids, in order to win the job.

"Based on upfront price alone, it's very hard for local firms to compete with Chinese companies. But when other factors are taken into account, such as local economic spinoffs and risks around the quality of imported prefabricated steel, New Zealand fabricated steel is very competitive.

"So it's great to see procurers - in the case of this project, HEB Structures on behalf of NZ Transport Agency - taking a bigger-picture approach."

HEB Structures, the structural arm of main contractor HEB Construction, awarded the contract to Eastbridge following a comprehensive tender evaluation process. HEB Structures general manager Noel Band said it was a close tender.

"Initially there was a considerable cost difference between the local and overseas bids, but when risk-related factors were considered, the price difference shrunk. Additional 'soft' factors, including maintaining successful local business relationships and the impact on the local economy, helped to swing the decision ..."

Steel Construction New Zealand manager Alistair Fussell said the increase in construction activity around the country meant demand for structural steel was growing.

"As the demands on the local steel fabrication sector increase, procurers will naturally look offshore. Our main concern is that they need to be aware of the risks around imported prefabricated steel. Compliance with local steel standards can be a real problem and can lead to costly and time-consuming inspections and in some cases, repairs.""

Eastbridge estimated there would have been an $800,000 tax-revenue loss to the Government if the steelwork was procured offshore.