Contractors warn of construction gap in government transport policy


New Zealand’s civil contractors have welcomed the record level of investment in transport in the Government Policy Statement on Land Transport, but are concerned a medium-term construction gap risks losing civil construction capability and capacity to overseas markets

Civil Contractors New Zealand Chief Executive Peter Silcock said the potential $2 billion gap would occur between 2019-2022 as investment shifted from completion of major state highway construction projects to construction of rapid transit and public transport projects, which would not really ramp up until post-2022.

Investment in rapid and public transport before 2022 would more than likely be on planning, land acquisition, design, consenting and procurement rather than construction, Silcock believes

“We understand there is a change in focus with the current government,” he says.

“We support this, and commend an increasing focus on regional development, road safety and sustainability.

“But these projects need to happen in a way that retains capability and capacity within the industry.”

Silcock says the gap as it stood was likely to result in a loss of capacity and capability, particularly to Australia as large infrastructure projects ramped up across the Tasman.

He says the latest policy statement was not without its merits, praising changes from the draft that would increase investment in the country’s vital transport networks and smooth out an unattainable spike in construction of rapid transit that would have forced contractors to recruit from overseas.

The increased continuity of work would make it more attractive for contractors to train and develop Kiwi expertise to do the rapid transit work required, Silcock believes.

“It’s very important we have a steady workflow, and we’re glad this is starting to gain recognition,” he says.

“We’ve been talking with Minister Twyford regularly, and what we need to do now is bring shovel-ready projects forward to fill the gap and ensure we keep the skills we need to get the job done.”

Despite a challenging gap in workflow, Silcock says the commitment to a long-term approach to infrastructure was very welcome for contractors as it would allow them to plan recruitment and training to develop a workforce that was ready to tackle the exciting projects planned for the future.

A further review of the policy statement is planned for 2019.

Silcock says the planned review was creating ongoing uncertainty amongst contractors, and called on the government to clarify whether this was likely to reinforce or reconsider its priorities expressed in the 2018 policy statement.

He welcomed further opportunities for collaboration between the government and industry so challenges around skills development and continuity of work could be well-informed and overcome collaboratively, and the best solution for New Zealand could be reached.