File photo / NZ Herald
Fifty West Coast jobs will go - 40 of them in Greymouth - when Sicon Ferguson closes its West Coast operations after missing out on the main state highway maintenance contract.
It proposes closing the Greymouth and Whataroa branches at the end of August.
Sicon Ferguson last week missed out on the seven-year highway contract, which is due to be awarded to rival Fulton Hogan. However, the fatal blow came earlier this week when the Christchurch-based Sicon board decided to withdraw from the big Mingha Bluff realignment at Arthur's Pass -- which had been expected to keep the Greymouth staff employed for two years -- and instead to close altogether.
Previously, road contracts were re-tendered every three years, but the new one is for seven years and a reduced maintenance programme. Industry insiders say that means Fulton Hogan will need only a handful of extra staff to run the contract, whereas past changes would usually mean a wholesale transfer of staff.
Sicon Ferguson is 100 per cent owned by the Rolleston-based Selwyn District Council, which bought Ferguson Brothers in 2012.
The closure ends a three-generation West Coast business, which had a pivotal role in opening up the Haast Pass highway in the 1960s.
Chief executive David Wilson said they had told staff of the proposal to close in the past couple of days.
"We have to go and talk to our crew. We've lost a major contract and we have to go through that and see if there are any other options," Mr Wilson said.
The company's West Coast operations had 45-50 staff, including part-time and casual positions.
Over the next two weeks they would look at what opportunities for work were now available for them on the West Coast.
"We would have a lot less work over there. It would be a different set-up ... our proposal is to close the branch."
Mr Wilson said the new New Zealand Transport Agency highway contract was different from previous ones and much longer.
In the past, contracts had been let through professional services such as Opus, however the new contract cut out those middle professionals. It also required the winning company to take more "ownership" of the roads.
Mr Wilson could not say if Sicon Ferguson would have needed to make job cuts to the existing West Coast staff if it had won the contract.
"It is difficult to say what the outcome would have been."
He confirmed the company had since pulled out as main subcontractor for the $22 million Mingha Bluff realignment project. Hawkins Construction Ltd won the tender.
"Without a branch structure it was potentially going to be a problem. We highlighted that was something we weren't wanting to take on," Mr Wilson said.
The Greymouth Star understands redundancy will not be offered to affected staff.
Mr Wilson said they would "meet all our obligations we've made as an employment agreement".
The company had won a contract on the east coast and would look at the possibility of relocating some West Coast staff there.
Fulton Hogan did not want to make any comment before the contract had been officially awarded.
Grey District Mayor Tony Kokshoorn said any job losses would be another blow to the region.
"This is not good news. With the potential for over 30 jobs going and the pending 40 plus that will go when Oceana Gold mothballs in Reefton -- add to that the Spring Creek eight, you get around 100 jobs potentially we're losing [in Greymouth], which makes it extremely tough on top of the past five years of lay-offs.
"We'll get through it because we have no choice, we have to. We have to remain positive."