NZ Contractor Perspectives 2016 by Contrafed Publishing

CONTRACTOR PERSPECTIVES 2016

NEW ZEALAND CIVIL CONTRACTING

PERSPECTIVES 2016

JANUARY

PERSPECTIVES 2016 FOREWORD

05 The view from the top

Bill English, Minister for Infrastructure, New Zealand

06 Keeping on the move

Simon Bridges, Minister of Transport

GOVERNMENT AGENCIES

10 Investing in roading construction

Geoff Dangerfield, chief executive, NZ Transport Agency

12 Working safer together

Gordon MacDonald, chief executive, Worksafe

INDUSTRY ASSOCIATIONS

16 All about relationships

Peter Silcock, CEO, Civil Contractors NZ

18 Managing road networks

Dr Steven Finlay, manager Business Solutions, Equip Ltd Partnership LGNZ

20 May common sense prevail

Roger Parton, chief executive, Aggregate & Quarry Association of New Zealand

21 Crane technology advances

Rod Auton, executive officer, Crane Association of New Zealand

22 Keeping the wheels turning

Jonathan Bhana-Thomson, chief executive, NZ Heavy Haulage Association

24 A year of confidence

Rob Gaimster, Cement & Concrete Assoc of NZ, NZ Ready Mixed Concrete Assoc.

27 Opportunity for infrastructure investment

John Miller, CEO, (National) – Civil Contractors Federation

28 Water infrastructure opportunities

John Pfahlert, CEO, Water New Zealand

30 Engineers as trusted advisors

Kieran Shaw, chief executive, Association of Consulting Engineers New Zealand

RESOURCES

34 Machinery – working in collaboration

Andrew Crane, president, NZ Equipment Suppliers Association

35 Construction technology predictions

Ryan Kunisch, director of Global Marketing & Product Management, Trimble

36 Design-Construct – a consultant’s view

Stuart Tucker, general manager, Civil Infrastructure, BECA

38 On the job front

Jason Walker, managing director, Hay Recruitment Specialists

40 Industry and the broader economy

Dr Ganesh Nana, chief economist, Business and Economist Research

42 The legal perspective

Sam McCutcheon and Arie Moore, Kensington Swan’s Construction Law Team

44 Civil Trade – a new industry qualification 44 Advertisers’ index

CONTRACTOR PERSPECTIVES 2016

CONTENTS

Gains, pains and opportunities Welcome to the 2016 edition of Contractor Perspectives, our annual publication made up of commentary written by industry peers from government level to associations representing every sector involved in making civil contracting in this country a success. Our contributors have provided a rich commentary with great insight into their respective industry sectors and we thank them very much for their wise words. Their brief was to look back on the past year and look into the crystal ball for the future, and take a broad look at the ‘state of play’. Over the years we will build up an annual, benchmark commentary on our contracting industry as a record of views and opinions as seen from the inside. As in the past, numerous regulatory reforms came into effect over 2015 and will continue into 2016, and this is discussed and debated at length. In particular new health and safety regulation will hit home over the next 12 months and the industry will enter a new era of responsibility and liability. You only have to read Bill English’s (Minster of Infrastructure) and Simon Bridge’s (Minister of Transport) perspectives at the beginning of this publication to appreciate the amount of work that civil contractors are facing over the next few years and even into the next decade. The Christchurch rebuild is still in progress while Auckland, our other major contruction centre, has given the green light to a capital works programme and 10-year plan involving $4.8 billion in road and footpath projects, $3 billion in public transport projects and a $4.7 billion spend in water and wastewater projects. On the national front, the Transport Agency’s 2015-2018 National Land Transport Programme shows a total spend of $13.9 billion, an increase of 15 percent on the previous 2012-2015 programme. This includes $6.4 billion for the State Highway network and $4 billion for local road infrastructure. The programme also targets a 21 percent increase in spending on public transport initiatives to $2 billion. The Transport Agency’s Network Outcomes Contracts (in its third year) have changed the way our roading network is maintained, and has made a big impact on civil contracting, most of it positive. But, as CCNZ chief executive, Peter Silcock, warns; “We seem to be standing still or losing ground on the maintenance of our existing assets.” The NZTA’s investment on road maintenance has significantly reduced over the past few years, while the agency ‘sweats’ the roading asset at risk. As Dr Ganesh Nana from BERL says in his perpective; ignoring infrastructure for any lengthy period of time inevitably results in a bigger bill sometime later. On the local government front Water New Zealand says urban water infrastructure alone has an estimated value of a little over $45 billion. “Over the next decade there are currently 1167 water projects over $1 million in value planned worth $15 billion,” says association chief John Pfahlert. However, trends towards Council Controlled Organisations (CCOs) will impact on how these projects are delivered in the same way many councils are taking a lesson from the NZTA and bundling roading contracts. In our ‘resources’ section the talk is on ‘technology’ advances bringing more visibility and connectivity across future projects as the ‘connected’ worksite continues to develop throughout the entire construction workflow. There is a push among suppliers to integrate GPS or GNSS positioning technology beyond just the surveyor and the machine. On the employment level, recruitment experienced a monumental shift in focus last year, says Hays. While the high demand for a range of civil professionals continues, the challenge is an on-going shortage of experienced professionals, especially at the intermediate level. And finally, Kensington Swan provides, as usual, a valuable legal perspective on the past year that was marked by three areas, all of which coincidentally begin with the letter L: legislation; liquidation; and liquidated damages. Interesting times for gains, pains and opportunities. So please read on. Alan Titchall Editorial manager, Contrafed Publishing

CONTRACTOR PERSPECTIVES 2016

EDITORIAL

PUBLISHER Contrafed Publishing Co Ltd Suite 2.1, 93 Dominion Road, Mt Eden, Auckland PO Box 112357, Penrose, Auckland 1642 Phone: +64 9 636 5715 Fax: +64 9 636 5716 www.contrafed.co.nz GENERAL MANAGER Kevin Lawrence DDI: 09 636 5710 Mobile: 021 512 800 Email: kevin@contrafed.co.nz EDITORIAL MANAGER Alan Titchall DDI: 09 636 5712 Mobile: 027 405 0338 Email: alan@contrafed.co.nz ADVERTISING / SALES Charles Fairbairn DDI: 09 636 5724 Mobile: 021 411 890 Email: charles@contrafed.co.nz ADMIN / SUBSCRIPTIONS DDI: 09 636 5715 Email: admin@contrafed.co.nz PRODUCTION Design: TMA Design, 09 636 5713 Printing: PMP MAXUM Articles in Contractor Perspectives are copyright and may not be reproduced in whole or in part without the permission of the publisher. Opinions expressed in this magazine are not necessarily those of the shareholding organisations.

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The official magazine of Civil Contractors NZ www.civilcontractors.co.nz The Aggregate & Quarry Association www.aqa.org.nz The New Zealand Heavy Haulage Association www.hha.org.nz The Crane Association of New Zealand www.cranes.org.nz Rural Contractors New Zealand www.ruralcontractors.org.nz The Ready Mixed Concrete Association www.nzrmca.org.nz Connexis www.connexis.org.nz

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The view from the top BILL ENGLISH, MINISTER FOR INFRASTRUCTURE, NEW ZEALAND

INFRASTRUCTURE INVESTMENT is a key driver of the economy. For

businesses to invest another dollar and employ another person, they need to be confident they have reliable access to the right infrastructure. Infrastructure also underpins the delivery of social services. Ensuring that education, health and justice networks are fit for purpose gives the government the best chance of making a difference in the lives of New Zealanders. The government has committed to a significant and ongoing infrastructure investment programme over the past seven years. This includes: • over $46 billion of property, plant and equipment added to the Crown’s balance sheet; • a $13.9 billion land transport programme between 2015 and 2018; • over $1.7 billion for the roll out of ultra-fast broadband, and $400 million for the Rural Broadband Initiative. But what matters isn’t the amount of money put in. Instead it is the results that this delivers for New Zealanders – and in this regard we are seeing good progress. For example, 54 percent of targeted end-users had ultra-fast broadband access in June 2015; up from 39 percent in 2014. We have created 127 Special Housing Areas across the country which have the potential to deliver over 50,000 new homes. The government’s focus on understanding infrastructure requirements also means we are now able to have more sophisticated conversations with the infrastructure industry, rather than simply creating a long list of different projects. We have a better understanding of the infrastructure challenges New Zealand will face over the next 30 years. For a start, we have a number of aging infrastructure networks that will need renewing. Our schools, for example, have an average age of 42 years, and parts of our water network have had a century of use. New Zealand’s population is aging. The median age has increased from 32.8 years in 1996 to 36.9 years today, and is expected to reach 42.7 years in 2043. This has implications for the types of services New Zealanders will want, the infrastructure required to deliver those services, and the available funding. Some of our regions will grow in size, while others will shrink. By 2045, another 1.2 million people are expected to live in New Zealand, with most of that increase coming north of Taupo. Those people will require housing, transport, electricity, water and telecommunications. They will also help to pay for it. Infrastructure is very expensive – something I’m acutely aware of as Minister of Finance. Together, central and local government are expected to spend an average of $11 billion on infrastructure each year for the next 10 years. As a country we own around $220 billion of infrastructure assets across central and local government – not far short of $50,000 for

every person in New Zealand. Better management of this huge investment can deliver real benefits for New Zealanders – and high performing infrastructure also helps the government’s books. Tackling these challenges requires us to think differently about our traditional approach to infrastructure, and to move away from simply building more things. Earlier this year the government launched The Thirty Year Infrastructure Plan, which sets out what this new approach should look like. There are 145 initiatives in total that will strengthen asset management practices, improve our understanding of demand, and lead to better decision making around infrastructure provision. And there is a clear timeframe for completing each of these. Together with other stakeholders, the government will develop national, shared data standards for roads, water and buildings. This will ensure we are all using a consistent base on which to build evidence, undertake forecasting and deepen capability. A common basis of facts, methodologies and approaches will help cut through the assumptions that sometimes lead people to talk across each other when making infrastructure decisions. Another key action is to look at how best to undertake longterm integrated regional planning – expensive and long-lived infrastructure assets won’t deliver the right results if planning occurs in silos. Schools, hospitals, roads, public transport, water networks and community assets all come together to provide vital services to businesses and the community, and regional planning needs to better reflect this. The Plan also promotes the need for an increased focus on nonasset solutions, such as demand management, to make better use of existing networks. This isn’t a new idea – taxes on fuel to pay for the National Land Transport Fund mean we already use demand management tools in roading, and all councils meter large water consumers. New technology will offer greater opportunities for managing demand for infrastructure assets over the next 30 years. But demand management shouldn’t be used without considering wider infrastructure outcomes such as increasing productivity or wellbeing. And charges for infrastructure use should never be used simply to raise revenue. New Zealand has good infrastructure – but the government is committed to ensuring that in 30 years’ time our infrastructure is resilient, coordinated and contributing to a strong economy and high living standards. It isn’t just big, new investment that will get us there. Instead, the biggest gains will be through a better understanding of the services New Zealanders expect, and better, more coordinated management of new and existing infrastructure to enable those services to be delivered – and that is what we are working hard on delivering. CP

CONTRACTOR PERSPECTIVES 2016

FOREWORD

Keeping on the move SIMON BRIDGES, MINISTER OF TRANSPORT

The government is making a record investment in transport infrastructure, while preparing for new technologies that will change how we travel. TRANSPORT INFRASTRUCTURE is essential to our economy, our

communities and society. As an export-led economy with a sizeable tourism sector, our prosperity depends on the efficient movement of both people and freight. The transport network is an $80 billion asset, comprising our roads, rail corridors, cycleways, ports, and airports. To maintain and improve this asset, central and local government invest around $4 billion in our transport system every year. The Minister of Finance recently released the government’s Thirty Year New Zealand Infrastructure Plan, setting out a longterm vision. As Minister of Transport, my priorities for investing in the transport network are to improve economic growth and productivity, road safety, and value for money.

Improving Auckland’s infrastructure As home to a third of the country’s population and our largest importing port – as well as being the point of arrival for the majority of tourists and new migrants – Auckland presents unique transport challenges. The government already invests around $1 billion each year in Auckland’s transport system. These investments are producing significant and real results. In recent years, Auckland’s public transport patronage has grown rapidly and congestion has been relatively steady while the population has continued to grow. In 2015, we made substantial progress on motorway projects as part of the government’s Auckland Transport Package, including Alice’s – the giant boring machine – completion of the twin tunnels excavation for the Waterview Connection. The $1.4 billion Waterview Connection provides an alternative to the busiest sections of the Southern Motorway, and is the country’s most expensive transport project. It will deliver significant benefits for passengers and freight traffic, providing a motorway link between the central business district and the airport, reducing dependence on the Auckland Harbour Bridge, and creating an alternative motorway link between Albany and Manukau. This highway investment has been complemented by investment in Auckland’s public transport and walking and cycling infrastructure. The $1.6 billion investment to upgrade and electrify Auckland’s metro rail network and to support Auckland Council to purchase 57 new electric trains has helped encourage a strong increase in rail patronage. The Nelson Street,

CONTRACTOR PERSPECTIVES 2016

Beach Road and Glen Innes to Tamaki Drive cycleways (totalling around $20 million) are highly visible examples of cycling’s popular re-emergence.

Investing for the future While good progress is being made, the government is also looking to the future – where Auckland is likely to continue growing much more rapidly than other regions. Seamless integration is needed between the investment made by government and the investment made by Auckland Council. A shared set of priorities for Auckland’s transport future is needed, and we are developing this through the Auckland Transport Alignment Project. Our challenge is to develop a transport system that provides increased access to jobs and services, copes with the wide range of trips that people want to make, and does all this in a safe way that makes the best use of the public funds that are available.

Regional investment Outside of Auckland, the Prime Minister and I opened the Tauranga Eastern Link in July 2015. This is the second Road of National Significance (RoNS) to be completed, and the Bay of Plenty’s biggest ever roading project. In 2016, construction will start on the final section of the Waikato Expressway, while Wellington’s Transmission Gully – part of the Wellington Northern Corridor RoNS – is New Zealand’s first transport sector example of how public private partnerships (PPPs) can improve value for money. We’re also advancing another 14 regionally strategic projects through the Accelerated Regional Roading Package, while new funding specifically targeted to regional improvements was included in the Government Policy Statement on Land Transport, which came into effect earlier in 2015.

Value for money and productivity It is important that each of these investments delivers a good return for the road users, taxpayers and ratepayers who fund them. Achieving this involves a combination of tools such as the One Network Road Classification system (which helps ensure

infrastructure is fit for purpose), alternative procurement methods such as PPPs, and making better use of the assets we already have. During 2015, the government introduced new rules allowing high capacity buses – and the uptake of high productivity motor vehicles continues to increase. With freight levels expected to grow by 75 percent over the next 25 years, allowing trucks to carry more per trip could reduce the overall number of trips heavy vehicles will need to take. A review of the Vehicle Dimensions and Mass Rule, which regulates the size and weight of vehicles, is looking to reduce compliance costs and improve heavy vehicles’ productivity further still.

Cycling infrastructure In addition to our investment in roading, earlier in 2015 I announced 54 projects that will receive funding under the Urban Cycleways Programme. Leveraging the National Land Transport Fund and local government contributions brings total investment to $333 million across 15 urban centres. This is the largest cycling investment ever made in this country, and one that will change the face of cycling across the country. It is an investment that is already paying off, with some projects now complete and open to the public.

The new technology frontier Innovation and enterprise have delivered amazing advances in transport technology. Many of these developments already affect the choices we make about how we travel.

Looking ahead in 2016 I expect to see the uptake of electric vehicles continue to grow. These vehicles are ideally suited for New Zealand, which has plentiful renewable energy and relatively low average travel distances. Our 240 volt electricity network and high levels of off-street parking will help make it easy for people to charge vehicles at home. I am pleased to see several private sector providers establishing public charging stations around the country, with a number already available in our main centres. Ride sharing is also likely to increase, with technologies such as smartphone apps allowing us to order up an ever-growing range of transport services on demand. The government’s review of small passenger service vehicles (such as taxis, shuttles, and private hire cars) is striving to encourage innovation, while ensuring vehicles and passengers are safe. Coming years will also see the continuing evolution of autonomous vehicles. These will offer particular improvements to road safety (as human mistakes are removed from driving) and efficiency (as computer-controlled vehicles can travel in very close proximity and reduce traffic congestion). We can see many other beneficial new technologies which have the potential to change our transport system, and there is no doubt there are several which have not even been imagined today. By ensuring flexibility in our regulatory environment and carefully choosing strategic priorities, the government is able to invest in high value infrastructure now, while preparing for the radical changes we might see in passenger and freight travel over the years to come. CP

CONTRACTOR PERSPECTIVES 2016

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Investing in roading construction GEOFF DANGERFIELD, NZTA CHIEF EXECUTIVE

Parting NZTA chief executive Geoff Dangerfield puts the huge investment in the country’s roading projects into perspective.

THE NEW ZEALAND TRANSPORT AGENCY heads into 2016 with the

largest work programme we have ever seen. This will demand strong partnerships with the contracting sector to ensure we deliver on our promise to create transport solutions for a thriving nation. The scale of the challenge is evident in the numbers. In the 2015/16 year our capital improvements programme on the state highway network is $1600 million, yet five years ago it was $900 million. And it is spread over a large number of projects, which demands a high level of project management skill and commitment. There is a sustained work programme for a number of years ahead.

2015-18 National Land Transport Programme We can see the forward programme across the whole land transport sector in the National Land Transport Programme. It outlines the three-year investment from the National Land Transport Fund and local government across all transport projects, maintenance and services. One of the Transport Agency’s most critical tasks is to compile the optimal programme for the whole of the country. The aim is to deliver on the government’s objectives for a transport system that underpins the country’s economic development and improves road safety. The government also seeks to ensure that every dollar spent is invested wisely and generates best value for money. For the three-year period just some of the investment figures are: $6.37 billion total investment on state highways, a 20 percent increase over the previous three years; $4.02 billion total investment on local roads, a six percent increase over the previous three years; $250 million total direct investment in walking and cycling; and 4800 kilometres of road network to be available for full High Productivity Motor Vehicle use.

Recent investment programme highlights In this calendar year, there have been some significant construction milestones achieved, including: opening, ahead of schedule, the Tauranga Eastern Link; opening of further stages of the Waikato Expressway at Cambridge; Memorial Park, Wellington, completed for ANZAC Day ceremonies; opening of the new Christchurch Bus Interchange; and the opening of

CONTRACTOR PERSPECTIVES 2016

Over the last few years we have seen significant growth in collaborative procurement and asset management throughout the sector through alliances and joint maintenance approaches. It is clear that collaborative contracting will be a key part of the future, especially in areas of network asset management and maintenance.

Phase 1 of the Nelson Street cycleway. The physical commencement of numerous projects has been acknowledged with sod-turning ceremonies.

Collaboration Just like linking the physical transport networks, the people and organisations that shape and deliver across the sector need to be well networked too. Working as one system means we can build on the synergies and strengths of each element. The Transport Operations Centres, based in Auckland, Wellington and Christchurch, are making a real difference. These are joint initiatives between the NZ Transport Agency, local councils and public transport agencies in our three main urban centres. They have a critical role in achieving better traffic flows and getting more productivity from our critical routes and making travel times more predictable. Over the last few years we have seen significant growth in collaborative procurement and asset management throughout the sector through alliances and joint maintenance approaches. It is clear that collaborative contracting will be a key part of the future, especially in areas of network asset management and maintenance. The new maintenance and operations approach was a significant opportunity for the sector – a big reform of our approach and business model. Our supply chain has responded well to our new network outcomes contracts, and how these are being delivered. We are almost through the first roll-out of these contracts and we have been careful to ensure a healthy market. We are committed to nurturing the capacity of the sector.

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Waikato Expressway

Our relationships with our suppliers and industry are critical. We are well aware that we only succeed when our suppliers succeed. The industry as a whole has embraced the Zero Harm commitment and we must collectively ensure that all our people will go home safe and healthy, every day, no exceptions. Our industry liaison and industry advisory groups are now well established and are integral to our way of working. We make available information on the forward programme, and work across the industry on what we’ve got going down the pipeline.

Freight moving For the long term, freight efficiency on our road network will receive significant focus. Forecasts anticipate a 50 percent increase in freight movements over the next 30 years. There has been considerable success in getting more freight on fewer trucks through our work on High Productivity Motor Vehicles. We will be turning our attention to improving the efficiency of the wider freight network, focusing on the connections between road, rail and inter-modal freight hubs. Improving port access, particularly deep water ports which cater for larger ships, is vital. The challenge here is that most of our ports are sited near to, or central to, city centres and are part of our busy urban transport networks.

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Reflecting and looking forward As I step down from the chief executive role after seven years, I am proud of the Transport Agency’s customer focus and commitment to service. We are an integral part of the public sector with a strong ethos of service to the public, while at the same time bringing a strong set of commercial disciplines and relationships with the private sector to achieve results. We have a strong investment focus and ensure that every dollar adds the best value to the transport system and benefits to users. Our procurement processes are leading and we have established ourselves as the public sector centre of excellence in this area. I am proud of our approach to performance and accountability. The future challenge is to continue to ensure we plan for the long term, yet have the agility to adapt to changing transport patterns and preferences. CP

The Programme Co-ordinator, NZIHT PO Box 9296, Waikato Mail Centre, Hamilton 3240 TEL. (07)

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CONTRACTOR PERSPECTIVES 2016

GOVERNMENT AGENCIES

Working safer together GORDON MACDONALD, CHIEF EXECUTIVE OF WORKSAFE NEW ZEALAND

We all know that New Zealand doesn’t have a great workplace health and safety record. The numbers make grim reading – on average every week at least one person dies in a workplace incident. The toll from work-related ill health is even worse; a shocking 600-900 people a year are estimated to die early from work-related diseases.

IN THE CONSTRUCTION sector alone more than 26,000 workplace

injuries occur each year – more than 3,000 of those are serious enough to require more than a week off work. That comes at a cost of $100 million dollars in ACC claims and millions more in lost productivity. But health and safety is more than just a numbers game. What those numbers can never show is the human cost – they represent real people with friends and family. Reducing the workplace death and injury toll is WorkSafe’s overarching purpose. The Government has set the target of a 25 percent reduction in both fatal and serious harm incidents by 2020. It is an ambitious, but achievable goal. One thing is for sure, WorkSafe will never change our workplace health and safety culture by itself. Real change will only come when everyone steps up – businesses, workers and the regulator. That’s why in the second half of 2015 WorkSafe and the ACC invited industry leaders in both the construction and manufacturing sectors to talk about the next steps for health and safety. The idea was to tap into the expertise of industry leaders to help develop ACC and WorkSafe’s plans to help support the sectors to lift their health and safety performance. The process worked like this – WorkSafe and ACC presented data on accident and ill-health rates across the sectors, and also the research we have done on how workers and their bosses think and feel about health and safety. The first question to the group was “do you recognise this picture?” But the stats, although useful, are only part of the picture. So the second stage was collectively exploring what lay behind these figures – what were the root causes of these incidents. This led to the final discussion about what we could all do that would be most effective in reducing the harm burden. The whole exercise was based on the understanding that industry itself is best placed to develop solutions, which reinforces one of my mantras – those who create the risk are responsible for controlling it. It was a very constructive exercise. One example of working with the sector is preventing falls from height. You don’t have to go that far back to remember when scaffolding was a rarity on your average residential house build. The problem was that serious falls weren’t all that rare either. So in responses to some pretty ugly statistics (including three deaths

CONTRACTOR PERSPECTIVES 2016

in 2010 alone) the Preventing Falls from Height programme was developed in consultation with industry. It was launched in 2011 with the slogan; “Doing nothing is not an option.” Health and safety inspectors stepped up their engagement with the industry – educating chippies, roofers and the like about the importance of taking proper safety measures to protect people from falls. There was enforcement action as well where necessary and while there was some grumbling initially today the industry is bringing its own innovation to health and safety. Local companies are taking the lead with the use of safety nets

In the construction sector alone more than 26,000 workplace injuries occur each year – more than 3,000 of those are serious enough to require more than a week off work. That comes at a cost of $100 million dollars in ACC claims and millions more in lost productivity.

and the development locally of “chippie catcher” membranes. Trade associations are also developing their own guidance material – a sure sign that the industry understands the issue and is taking it seriously. And it is working. Between 2012 and 2014 WorkSafe recorded an almost 30 percent drop in the number of serious harm incidents reported to it in the construction sector. That is lives saved and dozens of life changing injuries avoided. There’s no room for complacency, but the construction and demolition industries (and associated trades) deserve to be congratulated for the huge improvements they’ve made in preventing falls from height. Of course it’s not just in construction where WorkSafe is looking to engage directly with the industry. In May this year the Forestry Industry Council was established. It’s an industry led initiative supported by WorkSafe and ACC, building on the solid work of all parties over the last couple of years responding to a

shocking spate of forestry deaths. In agriculture too, WorkSafe is working closely with farmers, community groups and rural retailers to encourage the sector to take ownership of health and safety and find practical solutions to help save lives and prevent injuries. You’ll see more of this approach from WorkSafe over the course of 2016 as workplaces come to grips with the new Health and Safety at Work Act (HSWA), which comes into force on April 4. This article is not the place to go into any great detail about the Act – rest assured there will be plenty of information and advice available to support businesses and workers. The passage into law of the Health and Safety at Work Act is an opportunity for Kiwi workplaces to take a fresh look at how they approach keeping people healthy and safe at work. But the first thing to note is that if you’re already taking a responsible approach to health and safety then little will need to change. And despite the rumours you might hear, the new law won’t automatically mean masses of new paperwork. The HSWA recognises that each business is best placed to know what it should do to keep people safe. Businesses need to do what is ‘reasonably practicable’. This means working out what hazards exist but then moving on to think about risk, i.e. what are the chances of the hazard affecting somebody and

what level of harm would it lead to. Controls should then be pitched at this level of risk.Under the new law, the organisation has the primary duty of care to ensure the health and safety of its workers and anyone affected by its work. Company officers – directors, board members, chief executives and partners have a specific duty to exercise due diligence in making sure that their organisations have in place policies and procedures to identify and manage risk and some means of knowing whether they are delivering on those policies.

“Doing nothing is not an option.” Workers have a role too, and must take reasonable care for their own and their fellow workers’ health and safety. The people doing the work are often best placed to identify risks and find the best ways to eliminate or minimise them. So all businesses will be required to have ways in which workers can participate and be involved in health and safety. And that is the real health and safety challenge for 2016; it’s making sure that, from the boardroom to the shop floor, we are all working together to ensure everyone heads home healthy and safe at the end of the working day. CP

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All about relationships PETER SILCOCK, CEO, CIVIL CONTRACTORS NEW ZEALAND

Peter Silcock reviews the challenges and wins of the past year and the changes the industry faces during 2016. THERE WERE CERTAINLY some great highlights in 2015: The 30

Year New Zealand Infrastructure Plan released in August that identifies the need for a $110 billion investment in infrastructure over the next 10 years; NZTA’s announcement in July of a $13.9 billion programme of investment planned for our land transport system over the next three years (a 15 percent increase over the past three years); and the national and local governments starting to step up to the challenges of affordable housing and the infrastructure services they require. So, is the contracting industry singing? The answer is yes, in parts. While on one hand we are starting to meet the need for new infrastructure development, we seem to be standing still or losing ground on the maintenance of our existing assets. The NZTA’s investment on road maintenance has significantly reduced over the past few years and there has been plenty of talk about “sweating” the asset. Many contractors I have spoken to say they are already seeing the impacts on our roads. While this is an “eyes wide open” decision made by NZTA, I am not sure that the public really understands what is happening and it will be interesting to observe the public and political response over the next few years. The continued roll-out of the Transport Agency’s Network

While on one hand we are starting to meet the need for new infrastructure development, we seem to be standing still or losing ground on the maintenance of our existing assets.

Outcomes Contracts has reshuffled the deck, and there have certainly been some winners and losers in 2015. Those results are having flow-on effects in terms of competition for other work, which impacts on all contractors. Of more concern is the fact that there has not been any real progress in finding a way for local authorities to fund the massive investment required to upgrade, maintain and renew our aging 3 Waters (water, wastewater and storm water) infrastructure. In a number of areas the population is forecast to stall, or decline, and the proportion of retirees is growing, which means the

CONTRACTOR PERSPECTIVES 2016

challenges are simply getting bigger. As an organisation, Civil Contractors New Zealand saw some great outcomes and major achievements in 2015. After 11 months of waiting for a decision, we hailed the Supreme Court decision on a liquidator’s powers to claw back payments made by an insolvent company to a contractor, as a victory for common sense. The advocacy and support provided by contractors on this issue dated back to mid-2013 and the result was a huge relief to members that had helped to fund the appeal. The Supreme Court overturned an earlier Court of Appeal ruling allowing liquidators to claim back payments made by a company up to two years before its collapse. The decision was a very important one for the contracting market and gives contractors the confidence to invest in new equipment, training staff and expanding their businesses to meet the growing demand. The launch of the new Civil Trades regime by the Hon Steven Joyce back in December is a game-changer for the civil construction industry. For the first time people working in civil construction can obtain a formal certification recognising their skill, expertise and experience. Seeing the first 14 Certified Civil Tradespeople receive their certificates from the Minister was a real thrill for the many people who have supported them, and for Civil Contractors New Zealand, which has worked to establish the new regime in partnership with Connexis. The Civil Trades regime is a major building block for the industry. It will mean that more people will see the opportunity of a rewarding and meaningful career, not just a job, in our industry. So what will 2016 hold for our civil contracting industry? The likely themes will be continuous change, people and relationships. The changes to the Health and Safety at Work Act come into force in April 2016 and contractors will need to have strong worker participation systems in place. We all know that those systems and meetings need to be documented and recorded, but it will be up to each business owner/manager to make sure that we focus on ‘people not paper’. Don’t make those meetings a box ticking exercise. Talk about the most critical issues, engage your staff in their own and their workmates’ health and safety, make it part of their everyday working life and empower them to take action.

The Construction Safety Council’s new “ConstructSafe” competency framework and assessment tool will be launched in April to coincide with the new legislation coming into force. This is not another training programme, as the framework simply sets the level of competency that people need to have to safely enter a construction site (whether you are a carpenter, civil contractor or a timber salesperson). The system has been developed by the whole construction industry and is supported by an online tool that quickly assesses people’s competency. ConstructSafe has been comprehensively tested in a variety of construction sites, large and small, horizontal and vertical. It creates a single competency standard and ensures that everyone on site has the knowledge to protect their own safety and the safety of their workmates. As the additional investment by the NZTA comes into effect this year, the competition for skilled people across the industry will increase. Contractors need to focus on how they plan to retain their staff and remember that this is not all about money. Think about the development opportunities you are giving your staff, how you are recognising their expertise, how you are building a team culture. There would be no better way to recognise the skill, experience and workmanship of your staff than to register them in our new Civil Trades regime. The other big event in 2016 will be local body elections. The big question we have, is will those elections stimulate discussion about our aging civil infrastructure? Will we be able to break out of the focus on reducing debt and minimising rate increases to take on the costly challenges of renewing and

The NZTA’s investment on road maintenance has significantly reduced over the past few years and there has been plenty of talk about “sweating” the asset. Many contractors I have spoken to say they are already seeing the impacts on our roads.

developing our aging (yet invisible to the public) underground infrastructure? Let’s not hold our breath on that one! Civil construction is a dynamic industry. Cycles of work, large projects starting or finishing, mergers and acquisitions, staff changes, new technologies and natural disasters … they will all have an impact in 2016. Increasingly it is relationships that will carry a business through – relationships with clients, with staff, with subcontractors and head contractors, alliance and joint venture partners – they all contribute to successful businesses. In today’s market, strong partnerships are a vital component of winning work and efficiently and effectively delivering quality infrastructure on time. It is those relationships within, and outside your business, that will make your business more resilient and able to quickly and proactively respond to the challenges and the opportunities that 2016 offers. CP

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CONTRACTOR PERSPECTIVES 2016

INDUSTRY ASSOCIATIONS

Managing road networks DR STEVEN FINLAY, MANAGER BUSINESS SOLUTIONS, EQUIP LIMITED PARTNERSHIP LOCAL GOVERNMENT NEW ZEALAND.

Last year was significant for strengthening the partnership between councils as road network investors and the New Zealand Transport Agency as partner investors under the ONRC system. THE ONE NETWORK ROAD Classification system classification will help local government and the Transport Agency to plan, invest in, maintain and operate the road network in a more strategic, consistent and affordable way throughout the country. The ONRC project has three elements. The first is classifying roads into categories based on their function in the national network. This was completed in December 2013 following extensive engagement with road controlling authorities and other stakeholders. The second element is the customer levels of service, which define what the fit for purpose outcomes are for each category in terms of mobility, safety, accessibility and amenity. The third element is the development of the performance measures and targets, which effectively determine how the categories and customer levels of service translate into specific maintenance, operational and investment decisions. The Road Efficiency Group oversees the governance, leadership and regional implementation of the ONRC as a sectorled initiative. The ONRC system was a key recommendation from the Road Maintenance Task Force Report published in October 2012, and also endorsed by the sector.

Widening this insight to councils as contract owners, this close customer-contractor relationship enables contractors to assist council by assessing levels of service without the additional expense of asset condition inspection.

The Road Efficiency Group has inherited these recommendations and work programme and work streams are well underway nationally, regionally and locally to drive best practice activity management throughout the country – covering collaboration, procurement, data and the ONRC system itself. Under the sector leadership of the Road Efficiency Group, the first stage has been fully and successfully applied across all Council networks.

CONTRACTOR PERSPECTIVES 2016

Road Transport Unit Last year, LGNZ’s Centre of Excellence EquiP also launched the Road Transport Unit (RTU) under a service contract with the NZ Transport Agency. The RTU assists metro, provincial and rural councils to apply the guidelines for classification and test the thinking in dealing with complex networks with various and significant network demand conditions. With significant growth pressures facing Auckland, Tauranga, Waikato, Kapiti and Queenstown (amongst others), understanding current customer traffic patterns helps build the evidence base for future road use. With other areas experiencing stable or declining populations, the focus is on prioritisation of key strategic routes and maximising opportunities for freight and tourist access. Taken together, the sector achieved a very high level of 94 percent classified on the first round of submission. This was a significant achievement for all councils working collectively to agree on: road classifications with their geographic neighbours; prioritising appropriate regional roads, and aligning under a nationally consistent classification system. Alongside this milestone achievement, councils also developed and submitted their three year Transition Plans that outline how the full ONRC system is to be embedded for the 2018 to 2021 National Land Transport Programme.

Performance measures Having completed the ONRC classification the key part of the current work programme, in it’s second year of implementation, is to assess the network against the performance measures with the goal of identifying how the network performs against nationally consistent customer levels of service. The ONRC system supports councils to evaluate the current levels of service across key performance areas and assists activity managers to firstly measure their own levels of investment against these customer levels of service and secondly to be able to benchmark against other similar and comparable councils within and across the ONRC road categories. With this information in hand, council officers are then in

an informed position to begin the conversation with elected officials about the levels of service that the community deem as both fit for purpose and affordable. This is an important conversation to build the understanding of the demand of customers who use the network, and the current and future likely demographics that underpin any case for change. To do this, councils can gain real and tangible support from the delivery side of the sector partnership when working with roading contractors. While many contractors are used to providing physical asset services to councils (as clients and customers), the ONRC system creates powerful opportunities to strengthen the relationships between contractor and council as customer. Within the NZTA, David Darwin, Outcome Delivery manager for Highways and Network Operations, has assessed levels of service across the state highway network by reviewing the service level agreements and deliverables by reference to contractor contracts. As David says; “When we looked at the levels of service that were being delivered across the network, our thinking led us to assess the deliverables within the State Highway contracts. This enabled us to confidently predict customer outcomes by contract, and brought our contracting partners with us on the journey of understanding customer outcomes, which by the nature of the commercial delivery model, they intuitively understand.” This close customer-contractor relationship enables contractors to assist council by assessing levels of service without the additional expense of asset condition inspection. Importantly, both parties work together to agree on the service levels within contracts and to provide the physical works programmes that deliver against these Key Result Areas or KRAs. By defining KRAs within contracts that meet customer levels of service, the contractor becomes a partner in both reporting, assessing and delivering levels of service. Within the symbiotic relationship the focus on customer outcomes becomes the predominant lens of discussion, creating and strengthening the relationship with customer outcomes and not asset level condition as the paradigm of contract delivery. Contractors can enable councils to understand which areas of the network are meeting the performance measures and which are not.

Sharing information Another part of the strategic conversation is to share strategic information across geographic boundaries, especially with regional councils. These shared strategies contain key information about the expectations of each region over the forward period, and become key sources for regional alignment, while underpinning the key role transport connectivity plays in a region’s aspirations for growth. As Murray Gimblett, Principal Investment Advisor – Investment Assessment, Planning and Investment Group from the NZ Transport Agency says; “Council activities do not occur in isolation. When we review Activity Management Plans we are looking for how councils are firstly looking to deliver on the Government Policy Statement, and secondly on the business case for change. To see this in context, we build a picture of the region, to understand the council activity in context. We encourage councils to do the same.” Building a regional picture is again where the Road Transport Unit can help and the unit is now building regional clusters of capability through our suite of workshops. As part of this forward activity in 2016, we will be showcasing regional growth stories and strategies to help councils understand how their own significant investments play into this regional story. This is another means of building sector collaboration and sharing knowledge.

A fit for purpose network With support from REG, the RTU, contractors, and fellow council officers, the sector is deepening its understanding of the challenges and opportunities in providing a fit for purpose network which enables customers to undertake everyday activities critical to the local, regional and national economy. We need to be bolder in communicating the scale and quantum of investment in the national road networks. With many councils allocating the majority of activity in maintaining local roads, these investments carry the most weight for many business communities, who expect reliable and safe journeys. We are collectively here to ensure that happens, in a way communities can themselves afford. Meeting nationally agreed levels of service ensures that customer expectations are met, which can only enhance councils’ reputation for ensuring these critical assets are protected and enhanced for future generations’ use. That is a goal the entire sector can work to deliver on. CP

AQA works for the quarry industry – join us today 04 568 9123 l 021 301 522 l office@aqa.org.nz l www.aqa.org.nz

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Supporting New Zealand from the ground up

CONTRACTOR PERSPECTIVES 2016

INDUSTRY ASSOCIATIONS

May common sense prevail ROGER PARTON, CEO OF THE AGGREGATE AND QUARRY ASSOCIATION (AQA)

Access to resources and the new health and safety requirements are two of the biggest challenges for contractors and quarries as we head into 2016. AS MANY CONTRACTORS will know, the quarry industry is often left between a rock and a hard place with local councils. That very rock (or river stone) that contractors need for roads and drainage and for the buildings which a community demands can seem to come from a very difficult place – a quarry, often with troubled neighbours, almost always with objectors. Councils are obliged to mediate through a resource consent. What results is often an expensive process seeking to get approval for a new quarry. It is not unusual for councils to say no and to sterilise quarries from getting access to new rock resources. Or a consent can include such conditions as no weekend work and curbs on weekday hours. Five years ago, I noted to a meeting in Auckland as the city’s new council was taking office, that our major centre was already trucking in aggregate from as far away as Northland and Waikato; and that while Auckland was poised for ever more growth, the number of quarries in the region was gradually reducing. I also advised that it took around 10 years to establish a new quarry. To date, no new major quarries (to my knowledge) have been established in the area covered by the new Auckland Council. There have been one or two welcome renewals and extensions, but the Waikato is now New Zealand’s biggest source of quarry material; Auckland is third. As you can imagine, much of Waikato’s production is put on trucks heading for Auckland. The consequence of that for contractors is that for every 30 kilometres a truck covers, the cost of the aggregate it is carrying is doubled. I regret to say that things are poised to get worse in 2016 and not just in Auckland. From Northland to Southland, a number of councils are preparing the plans that will guide their resource management for the next decade. All of them are picking up on the 2014 Supreme Court decision on King Salmon’s proposal to farm salmon at a site in Port Gore in the Marlborough Sounds. The Supreme Court overturned an earlier ruling which said the “compelling” benefits the site provided for aquaculture required a “balanced” approach to be taken. The Supreme Court said this was wrong in law and avoiding adverse effects on natural landscape/character could not be overruled. Councils are now writing policy which sets out to ‘avoid’ anything with particular environmental impacts. Our fear is that this will extend to meaning a ban on issues such as expansions on river aggregate extraction. This is not just used for roading and construction; it is often used by councils for flood protection

CONTRACTOR PERSPECTIVES 2016

work. The very extraction of aggregate reduces flood risk. Such plan proposals lack commonsense. If it becomes harder and harder to extract river shingle or set up a quarry, New Zealand eventually grinds to a halt. Everything that happens in an economy has some effect on natural resources. It does not mean destroying the environment. Even former quarry sites have their uses as you can see if you visit Mt Smart Stadium. The AQA trusts that sense will prevail. The other major issue affecting quarries and contractors alike as we head into 2016 is the new Health and Safety at Work Act 2015 which takes effect in April. In a grim reminder of the consequences of not following best practice Murray Taylor died in a limestone quarry collapse at Waikari in North Canterbury in June 2015. He was operating the quarry without the appropriate certificate. The Waikari tragedy has awoken many landowners, including some contractors, to the risks and liabilities they face as quarry site owners. One issue to be addressed is that there may be hundreds of disused quarries around New Zealand in varying states of repair. As contractors you may own some of them. Some quarry operators are now working with owners to remediate sites to reduce quarry walls to more acceptable slopes or fill in water pits. This work has increased since the new health and safety legislation [Health and Safety in Employment (Mining Operations and Quarrying Operations) Regulations 2013] emerged two years ago. A fundamental difference between the existing legislation and the new Act is that the former relied upon an employment relationship being in place before liability ensued, while the latter does not. It does not matter whether the workplace is high risk or not, or whether worker representation is required or not. The provisions of the legislation require any Person Conducting a Business or Undertaking (a PCBU) to manage the risk in the workplace and to either eliminate the risk or minimise it as far as is reasonably practicable. Worker participation in that process is required under the legislation. Regulations underpinning the Act are still being drafted. In the interim, Good Practice Guidelines for Health and Safety at surface mines and quarries, now published, provides the necessary guidance. I urge you to seek a copy and read it over the summer break – www.minex.org.nz. The AQA looks forward to working with contractors to get some sensible planning outcomes and improved health and safety results through 2016. CP

Crane technology advances ROD AUTON, EXECUTIVE OFFICER, CRANE ASSOCIATION OF NEW ZEALAND

Reviewing the crane industry from the perspective of the economy and technological advances in design. WITH AVERAGE ANNUAL growth in the economy of 3.5 percent to

June 2015 we are experiencing construction growth driven by the sound economy. Statistics NZ has actual value of building work consented in October 2015 alone at $898 million for residential consents and $479 million for non-residential work. This is also reflected in the RLB Crane Index fourth quarter2015 with continued growth in the key markets of Auckland and Christchurch. Growing business confidence has seen growth across the whole construction and infrastructure sector and this has seen huge demand for cranes across the whole industry. The latest BNZ Confidence Survey noted that there was: “Overwhelmingly

...the residential sector accounts for 28 percent of cranes predominantly from multi-use residential projects in Auckland. strong comments nationwide” in regard to the construction sector. The RLB Crane Index states that projects with cranes in the commercial and mixed use sector accounts for 50 percent of all cranes surveyed and the residential sector accounts for 28 percent of cranes predominantly from multi-use residential projects in Auckland. With the downturn in Australia, large numbers of New Zealanders are returning home and for the first time there have been more worker imports than exports. Even so, there is still a shortage of quality operators in the crane sector that will get worse over the next few years as the Christchurch rebuild starts ramping up.

Advances in crane technology Advances in crane technology are resulting in improved safety, load handling, reliability and overall performance. Crane manufacturers are extending the limits that cranes can do through technology and design by increasing capacity, extending the length of booms, reducing weight, introduction of hybrid engine packages, wireless multi-sensor load indicators, wireless anti-two block systems, and interlocking telescopic boom systems. With the gains in technology also comes the responsibility of the operator to remain current and training systems are catching up with simulators being utilised overseas and manufacturers offering training packages to the buyers of the cranes.

Despite the advances in technology and training of operators, many external influences affect the maximising of those advances. For example, poorly maintained infrastructure, particularly underground like water and waste pipes, is in many cities due for replacement. Cranes are big units and with increased compliancing and health and safety, larger cranes are required to lift less weight. This of course has an impact on the infrastructure. So external influences can inhibit those technological advances.

Moving forward In July 2015, the Crane Safety Manual was launched and has proven to be one of the most comprehensive operator references in the world. The Crane Safety Manual in conjunction with the Approved Code of Practice for Cranes have become the standard in this country. Legislation changes have mobilised all industries to reflect on their policies and practices and the new Health and Safety at Work Act 2015 has had the most impact. The crane industry recognised early that this legislation would be critical and the Act is reflected in the Crane Safety Manual. The Vehicle Dimensions and Mass Rule is at the submission stage and NZTA has conducted a number of stakeholder workshops to address likely changes. Those stakeholders have had considerable influence on the rewrite of the rule and we await the review document to ensure that industry’s needs are being met. Changes are also occurring in the Resource Management Act to reduce costs and time waiting on consents. This can only benefit the economy. There have been some changes by NZQA to alter how qualifications can be achieved. Unit Standards are now not recognised as the only method of taking on industry knowledge. As a result, more emphasis is being focused on the graduate profile outcomes. These outcomes determine what a trainee will need to know to gain a qualification. Effectively this recognises that there are other methods of teaching and gaining knowledge and there is bound to be some benefit for trainees for whom the classroom is not a happy place. All of these factors, the economy, legislation, technology and training contribute to a vibrant economy and for every crane you see on the skyline there is a huge construction infrastructure in behind it and this is why the industry is a key indicator of a thriving economy. CP

CONTRACTOR PERSPECTIVES 2016

INDUSTRY ASSOCIATIONS

Keeping the wheels turning JONATHAN BHANA-THOMSON, CHIEF EXECUTIVE, NZHHA

Getting the balance between regulation while allowing for innovation and efficient service to clients is the avenue that the NZ Heavy Haulage Association seeks to provide for industry members.

EXAMPLES LAST YEAR where the NZHHA sought to achieve greater definition of a balance between regulation, innovation and service were changes that came in mid-2015 around commonsense enforcement of weights in transportation, and the proactive promotion of changes that this association wants to see around main legislative rules for over dimension loads. While the transport of loads that exceed normal dimension, or weight limits, are a small part of the road transport freight sector, large items moved are for clients that are spread right across the whole economy. Infrastructure developments, especially roading and the dairy sector, are areas that lead the industry in the transport of large indivisible items such as bridge beams and silos. These larger projects have often been in planning and development for years and are immune to the vagaries of the economy – for example the two-weekly change in the price of dairy products. These days, New Zealand is much more integrated into the global market for commodities, and so the international price for items such as coal or dairy products will ultimately affect the demand by client companies working in these sectors for the transport of large items of equipment. Less demand from areas such as mining and coal has impacted on the volume of large excavation and mining equipment needed to be shifted around the country, and this has impacted on specialised transport company members that service these sectors. At the recent World Crane and Transport Summit held in the Netherlands, the CEO of transport and crane giant Mammoet, Jan Kleijn, outlined some of the current disruptive factors that were at work around the world. He mentioned lower oil prices, refugee crisis in Europe, and political issues associated with Russia as factors influencing economic growth worldwide. Then there are web-based disruptive technologies, such as Uber and Airbnb, that can disrupt the previous natural order of things. “Imagine if somebody started an Uber service for cranes and transport … a company without any assets,” he said. New business models have the opportunity to challenge the regulatory framework that surrounds an industry, and we have already seen this with Uber successfully getting our Ministry of Transport to review the current rules around the taxi industry. In the heavy haulage and overdimension transport sectors,

CONTRACTOR PERSPECTIVES 2016

the association is seeking improvements to our operating environment while, at the same time, challenging the rationale of those regulatory bodies that seek to add layers of red tape. Most of these arguments flux between efficiency and safety, and we believe that these aims are not opposed, but do need to be kept in balance with one another.

In the heavy haulage and overdimension transport sectors, the association is seeking improvements to our operating environment while, at the same time, challenging the rationale of those regulatory bodies that seek to add layers of red tape. Most of these arguments flux between efficiency and safety, and we believe that these aims are not opposed, but do need to be kept in balance with one another.

The end of 2015 saw a collection of incidents occur within the sector that raised concerns, both within the industry and within some of our regulatory bodies. The industry is facing these head on and will be a strong influence on the work programme for the association and its members in 2016. Progressions being scoped include better training regimes to ensure that best practice is spread right through the industry; better public education to ensure that members of the public are informed about out sector – and particularly about road risks. At the same time we wish to utilise various new forms of technology to enhance operations and information. These ideas will be fed into the formal review of the Vehicle Dimensions and Mass Rule (VDAM), where appropriate, and also into other forms of best practice guidelines. We prefer guidelines rather than hard and fast rules, because specifying the rules makes change harder in the future.

A 760-tonne ‘first section’ being hauled up an 18 degree gradient at Mill Creek wind farm, Porirua, by Tranzcarr Heavy Haulage in 2014.

The NZTA and the Ministry of Transport which are leading the VDAM Reform Project, are being responsive to the ideas put forward to the Rule from the Association, but this is only a small part of the scope of the project. The changes to general freight and high productivity trucks could mean small but significant improvements to the efficiency of general freight and transport across the industry – and all the sectors that are serviced. Stakeholders from other sectors (wider than the normal transport industry) should consider the opportunity to contribute to the consultation process, due to close in February. The association sees one of its roles is to develop, and have input into, various codes and best practice guides. With the increasing emphasis on health and safety there are opportunities for all industry associations to coordinate such codes. Over this year we see opportunities with piloting, asbestos, working at heights, and radio communication as areas where there is potential for us to lead the development of various codes. We are looking forward to reviews and input into various

other control aspects of the industry this year that will enable flexibility and safety, particularly for the heavy haulage and the heavy recovery sector. On top of this, other infrastructure owners are reviewing their procedures in light of a shared approach in the new health and safety legislation – these include power network companies – and this is illustrative of the fact that numerous regulatory authorities are constantly looking to improve their safety procedures. We also need to ensure that whatever legislation is put in place translates practically on the road. The next 12 months should see a further pipeline of work for various industry sectors the association represents, be it heavy haulage or housemovers, and the load pilots and heavy recovery sectors that service them. The association will continue to represent the interests of these operators and ensure that roading projects and other infrastructure continue to provide suitable routes for the transport of large loads. CP

CONTRACTOR PERSPECTIVES 2016

INDUSTRY ASSOCIATIONS

A year for confidence ROB GAIMSTER, CEMENT & CONCRETE ASSOCIATION OF NEW ZEALAND (CCANZ), AND NEW ZEALAND READY MIXED CONCRETE ASSOCIATION (NZRMCA)

Informed by construction metrics, government projections and positive results achieved over the past 12 months, 2016 looks set to yield further outcomes that benefit the wider building sector.

ALONG WITH ADDRESSING emergent issues this year, the concrete

industry will explore apartment build opportunities, and continue to place a premium on ‘quality’, robust regulation and training.

Reflections on 2015 One of the best mechanisms to help gauge future activity is to assess the recent past, and 2015 was (with few exceptions) a very productive year for the construction sector. Construction in Auckland and Christchurch was pivotal to positive signs and, with support from most of the regions, these centres continued to perform at a pleasing level. The general air of confidence from 2014 carried over into 2015, with consents issued, work put in place and ready mixed concrete volumes all sustaining upwards movement. The concrete industry maintained a strong market position in relation to other materials, and experienced an increase in ready mixed concrete production of over 10 percent nationwide. In total approximately 3.8 million cubic metres of concrete was produced – close to historic highs. Notable concrete-based projects that grabbed headlines in 2015 were the Waterview Connection in Auckland, and MacKaysto-Peka Peka just north of Wellington – both examples of the huge amount of work currently underway as part of the Roads of National Significance. The 15,000 cubic metres of concrete poured into the foundation of the new acute services building at Christchurch Hospital in November was further evidence of the rebuild’s steady continuation. Although there were signs of a deceleration in terms of ‘growth’ during the latter part of 2015, the outlook for 2016 remains encouraging. Mid-2015 saw commentators begin to lament the drop in global dairy prices (and in turn farmers’ spend), a levelling off in the Canterbury rebuild and rising unemployment as leading to a fall in economic confidence. While optimism did fade mid-year, by the end of 2015 these same commentators were talking about economic growth “gathering pace” and businesses expecting “improved performance”.

CONTRACTOR PERSPECTIVES 2016

Progressing into 2016 A quick look at major projects scheduled for 2016 shows that the Auckland CBD will effectively be a construction zone, with the City Rail Link, the International Convention Centre and numerous office and apartment towers all about to get underway. In Christchurch, a recent Canterbury Employers’ Chamber of Commerce survey of key decision makers in the rebuild indicated that progress was between 35 and 40 percent. Similarly, a CERA report from July estimated the rebuild – measured as progress in residential, non-residential and civil construction – was 41 percent complete. So, there is a lot more work to come.

National Construction Pipeline report One of the clearest forecasts that in 2016 (and beyond) the value of all building and construction will reach unprecedented levels is the MBIE’s National Construction Pipeline Report 3. Prepared by Pacifecon (NZ) and BRANZ, this report provides a view of construction demand for the six years ending 2020. Amongst the report’s top-level findings is that the country is building more by value than ever before, even after allowing for inflation. The report also projects that the annual value of all building nationally will increase by 19 percent from 2013 to 2020. The report identifies notable trends, including Auckland’s domination of the national demand for building (accounting for over a third of all building, by value). There is also a move to higher density housing (in 2017 multi-unit dwellings will make up a third of all new consented dwellings). The next 12 months will be an exciting time for the wider concrete industry, not just on the back of a healthy building sector and concrete production. There will be opportunities to grow residential market share via demand for medium density housing, as well as demonstrate the industry’s commitment to robust regulation and training. ‘Quality’ will remain a priority in 2016, in terms of material supply as well as design and construction, while major changes in cement supply will also come into operation. This is taking place against a backdrop of concrete industry association consolidation discussion. Driven by increased levels of immigration, a lack of available land

and lifestyle choices, the demand for medium density residential construction is of huge interest to the concrete industry. A recent CCANZ study confirms that concrete offers benefits over other materials in terms of cost (upfront and long-term maintenance) and performance (fire, acoustic and seismic). As such, the concrete industry will be working to help architects, structural engineers and developers understand the advantages of ‘quality’ concrete design and construction for apartment buildings.

Commitment to quality ‘Quality’ extends beyond best practice advice through to the control of concrete as a material. This is evident in the NZRMCA Plant Audit Scheme which operates to provide a rigorous audit of the quality systems in place at ready mixed concrete plants. Similarly, Precast NZ’s Plant Certification Programme provides a level of confidence that products from a certified plant are supplied from an established operator and a plant with appropriate manufacturing facilities and quality assurance programmes. Both these systems are subject to continual improvement, with the NZRMCA scheme completing its online transition during 2016, and the Precast NZ Programme anticipated to achieve greater uptake.

Standards and training Updated versions of key Concrete Standards will come into play this year. The recently revised NZS 3121 Water and Aggregate for Concrete now caters for recycled concrete as aggregate, as well as offering additional tests for aggregate cleanliness. An amendment to NZS 3101 Concrete Structures Standard that takes into account recommendations from the Canterbury Earthquakes Royal Commission will also be available in the coming months. During 2016 the concrete industry, in association with the BCITO, will announce the inaugural Concrete Apprentice of the Year Award. This is just one (albeit high-profile) example of the industry’s pledge to train well in order to negate the skills shortage, which has become a huge strategic issue across the building sector. Understanding and meeting responsibilities under the new Health and Safety at Work Act will also be an important matter during 2016.

Amongst the report’s top-level findings is that the country is building more by value than ever before, even after allowing for inflation. The report also projects that the annual value of all building nationally will increase by 19 percent from 2013 to 2020.

Association consolidation Initiated at the 2014 Concrete Conference and progressed during 2015, the discussion around association consolidation across the concrete industry will reach a critical stage this year. In line with developments in other industries here and internationally, the potential amalgamation of the six principal concrete industry associations as a means to achieve more efficient and effective outcomes has to-date been well-received by the majority of stakeholders. The current government has done a tremendous amount of work to negate the boom-bust cycle, helping to address internal systems and behaviour as the primary causes, as well as offsetting external factors. However, it is always wise to implement interventions and policies today that will lessen volatility tomorrow. CP

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Opportunity for infrastructure investment JOHN MILLER, CHIEF EXECUTIVE OFFICER (NATIONAL) – CIVIL CONTRACTORS FEDERATION

John Miller provides an industry perspectives from the across the Tasman. AUSTRALIA IS IN THE MIDST of an evolution in its economy as the

country seeks to transition from what has been a heavy reliance on our mining sector. There was a lot written about this and the impact it had on the civil construction industry throughout 2015. Once phenomenal, Australia’s mining activity continues to abate in terms of new infrastructure and the shipping of raw materials. Over here, we are seeing holes punched in our economy on two fronts in relation to mining – the mentioned slowdown in demand for infrastructure to augment the actual mining process, and an erosion in the demand for raw materials. There is no question this downturn in activity has caused major issues for federal, state and territory governments and the many businesses involved in infrastructure development. With Australian economic growth forecasts being wound back, certainly over the short term, what is it going to take for Australia to boost productivity and begin to emerge from the slump in activity?

There has simply not been enough work to sustain everyone in our industry and there is the continued propensity of governments of all persuasions, shapes and sizes to be wedded to the motto, “bigger is better” when it comes to project contracts. On reflection the civil construction industry in Australia faced similar issues in 2015, if not the same issues, that have been at the forefront of debates for a number of years. There has simply not been enough work to sustain everyone in our industry and there is the continued propensity of governments of all persuasions, shapes and sizes to be wedded to the motto, “bigger is better” when it comes to project contracts. My predecessor, Robert Row, discussed the issue of unbundling large projects in his perspective last year. I won’t cover what he said again, but what Rob articulated so very well last year remains an issue. Although, it can at least be argued that the debate is resonating within some procurement agencies, many smaller operators who are unable to compete would rightly suggest unbundling is not happening quickly enough to save them. As a result of the downturn in the mining sector, there is capacity within industry to get to work and deliver some of

the infrastructure deficit governments across the country acknowledge as being a real issue. There is a backlog of infrastructure needed for the country to realise its potential There is no time like the present to begin to remedy that problem. Australian governments are in a position to borrow, as interest rates aren’t going to get any cheaper, and we have the industry people and resources to get things moving. Population growth in Australia, whilst experiencing a slight slowdown against earlier strong growth rates, still sits at around 1.4 percent per annum nationally. We have a total population verging on 24 million and heading toward the 30 million plus number expected within the next 20 years or so (remember former Australian Treasurer Peter Costello’s urging to have an extra child for the country?). These extra numbers cannot be accommodated without infrastructure needs and expectations. Turmoil in the Middle East may indeed hasten our need to deliver infrastructure to cope with both our normal migration and our humanitarian programmes. Economic transformation won’t come without improved support infrastructure in the form of transportation and communications services. The building of this critical infrastructure should comfort the civil construction industry with a very solid pipeline of work for years to come. The bigger challenges for 2016 will be to find ways for those with their hands on the levers to ignite this opportunity. Putting a dent in our infrastructure backlog could be tied up in the looming debate on taxation reform in Australia. There is strong appetite for such reform that could see significant changes over the next few years, which would provide the impetus for greater spending on infrastructure. However, as noted earlier, we should not have to wait for tax reform before we begin the job of investing in critical infrastructure. The capacity of governments in Australia to borrow for the purposes of building their economies already exists, and this should be one of our most oft-repeated mantras throughout 2016 and beyond. In summary, 2015 proved another year of uncertainty for many in our industry – although it should not be misconstrued that everyone is struggling to find work. Forecasts vary across the states and territories over infrastructure activity levels this year, but it is up to us to encourage governments now to make their investments and spend for the sake of our industry, and economy at large. Meanwhile, myself and the association wish all of you across ‘the ditch’ a very successful 2016. CP

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Water infrastructure opportunities JOHN PFAHLERT, CEO, WATER NEW ZEALAND

The latest iteration of the 30 Year Infrastructure Plan launched last year provides a useful basis for a review of the Three Waters sector and opportunities for civil contracting.

URBAN WATER INFRASTRUCTURE has an estimated value of a little over $45 billion. Over the next decade there are currently 1167 water projects over $1 million in value planned worth $15 billion. It’s important we get expenditure decisions right in this area for both regions and the nation. The Three Waters survey conducted by Local Government NZ in 2014 highlighted deficiencies in the state of information about existing assets, and an uncertain future as to how councils would fund asset replacement in the years ahead. Half the district councils in New Zealand are experiencing declining populations. With many of those residents on static incomes, Treasury has expressed concern it may be seen as the funder of last resort for infrastructure replacements and maintenance in the event councils are unable to afford asset replacement. Elements of the 30 Year Infrastructure Plan are designed to deal with how to improve information to aid decision making. Over the past decade Water New Zealand has championed the adoption of corporate models of water governance as a means of improving service delivery for waters infrastructure. To date that hasn’t been a particularly successful strategy.

Perhaps the biggest change ahead for civil contractors is to watch for change in the CCO space. If councils do decide to deliver services in the way Auckland works with Watercare there will be significant implications for the future structure and delivery of physical works However the current work by Waikato councils investigating a Council Controlled Organisation (CCO) for three waters delivery is encouraging. We support the initiative. Shared service arrangements between councils already occur in many places and more are planned. The Infrastructure Plan lends support to this approach – noting that if it’s successful the councils will be able to share their expertise with others. While there are still communities consulting over proposals to amalgamate with their neighbours, the failure of proposals

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for amalgamation in Hawkes Bay was entirely predictable and simply adds weight to the Productivity Commission’s report last year on land for housing, which notes that internationally water utilities with fewer than 100,000 connections are more inefficient and expensive than those with more connections. It’s unfortunate that more councils haven’t seen the benefits of corporate models of water governance. In Scotland, where the population is similar to New Zealand, they have one water authority to deliver all the services. However, local politics and resistance to the CCO model occurs because it is seen as the first step to privatisation of assets – an ongoing concern of local communities. While former Minister of Local Government Paula Bennett signalled a desire for more action in the CCO area, time will tell if her replacement Sam Lotu-Iiga is willing to use a big stick to force progress. The Infrastructure Plan has responded to government concern about poor information on three waters assets by funding a project to develop metadata standards for pipeline and other assets. It will be a big step forward if we can convince councils to adopt a consistent approach to data collection. If they don’t do so voluntarily I suspect government might well be prepared to regulate their use. This initiative will take many councils outside their comfort zone, forcing them to adopt recording and reporting systems that will expose them to greater scrutiny by their peers. Another initiative commenced in 2015 required councils to implement new planning and reporting requirements in their 2015 Long Term Plans (LTPs) under the Local Government Act. These include non-financial performance, asset value and asset management, as well as strategies to support planning and dialogue with communities over future levels of service. You can read into the words “levels of service” an implication that if councils can’t afford to replace assets then perhaps some communities will have reticulated water and wastewater services removed. Unlikely perhaps, but certainly on the cards. It does however signal the hard choices that some communities have ahead of them. I hear that councils are struggling with how to address these LTP requirements. Really difficult funding choices lie ahead for many councils. The 2015 year saw the end to the drinking water subsidy scheme run by the Ministry of Health. If government thinks the scheme has resolved the issues faced by small communities

The Central Plains Water Scheme, a landmark project in New Zealand.

trying to comply with the Drinking Water Standards – think again. There is huge financial pressure on small communities to achieve compliance, and a need for an ongoing scheme which makes available at least $20 million a year to assist small rural communities to bring their water supplies up to standard. The year past has also seen public debate on iwi rights and interests in fresh water – an area which will only see more activity in the year ahead. I see no particular downside in an allocation of resource to iwi, nor any particular reason why rights of access to fresh water should not be allocated and tradeable. Going forward we need to work with councils to try and get them focused on whole-of-life costing in the maintenance and replacement of three waters infrastructure. The current emphasis on price is understandable but short sighted. We also need to have more widespread adoption of consistent standards in the choice of materials and their installation. Again this harks back to the whole-of-life approach to tendering and contracting. A much improved and consistent approach to both data collection and asset management would complement this approach. I predict a more successful National Performance Review by Water New Zealand in 2016, where we expect a 25 percent increase in participation by councils. By benchmarking

performance against other councils there is the opportunity to learn what can be done better. In December in Paris world leaders met in the Conference of the Parties (COP) to discuss climate change. Practically little has changed since the first COP in 1992 in Rio de Janiero. World leaders, including leaders in New Zealand, wring their hands and make platitudinous statements about the need for action, but little changes on the ground. Our emissions continue to rise and so does global sea level. Councils have real challenges ahead as they attempt to deal with the consequences of sea level rise – an issue well covered in the latest report from the Parliamentary Commissioner for the Environment. This issue isn’t going to go away and the implication for storm-water outfalls near the coast is going to place a huge cost on councils in the decades ahead as they attempt to grapple with this issue. If councils progressively place existing coastal property into hazard zones notated on LIMs – watch the sparks fly as asset values are destroyed! Perhaps the biggest change ahead for civil contractors is to watch for change in the CCO space. If councils do decide to deliver services in the way Auckland works with Watercare there will be significant implications for the future structure and delivery of physical works. CP

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Engineers as trusted advisors KIERAN SHAW, CHIEF EXECUTIVE, ASSOCIATION OF CONSULTING ENGINEERS (ACENZ)

In an increasingly risk-averse country, engineers can create and lead a wave of innovation, and develop new advances in social infrastructure. OVERALL, 2015 WAS a positive year for ACENZ as we continued

to advocate on behalf of our members and prioritised strong relationships with all sectors. Significant issues and milestones included discussion documents issued by the Ministry of Business Innovation and Employment’s Engineering Advisory Group Procurement & Rules Reduction Taskforce, and Ministry of Education stakeholder liaison gaining strength and credibility. Meanwhile, increased funding for roading works maintained a positive work stream. The Building (Earthquake-prone Building) Amendment Bill provided new criteria for assessment. We continued to await reforms to the Resource Management Act. Local government structures, amalgamations and Council Controlled Organisations (CCOs) were evaluated. Clustering and shared services within authorities have become more prevalent. And a surge of council in-sourcing and in-house engineering and design has raised questions about efficiencies and councils’ professional competencies.

The year ahead The key issues and themes we see emerging for 2016 are: consulting industry contracts review and updates; occupational registration of engineers; a focus on development and training for young professionals; succession planning for SMEs; joint resourcing initiatives with tertiary education providers; closer alliances with contractors and other professional bodies; and broadening the scope of ACENZ Annual Project Awards. Representing the first major New Zealand international professional consulting sector conference – ACENZ is hosting ASPAC2016 in Queenstown in May. Upwards of 300 delegates from the Asia Pacific region including CEOs, industry experts and ministers, will come together to explore the challenges and opportunities our industry faces.

Stand up and be counted Over recent years ACENZ has been underlining the need for professionals in the built and natural environment, and particularly professional engineers, to step forward and demonstrate a willingness to be leaders within industry, and take a similar strong role in the wider public environment. Engineers are known to be modest individuals who like to stay in the shadows and not rock the boat.

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From Galileo and Da Vinci to Eiffel and Brunel, past recognised leaders in engineering-related sciences shared one common feature: they were prepared to be innovative beyond the practices of their time. And they were willing to take a risk in following their own judgement and pursue radical solutions and visions. Despite being subjected to criticism, and even ridicule, from their peers and the public, they became recognised leaders in their lifetime.

The operative word is risk. Engineers are often called upon to manage (constrain) their exposure to risk and are cautioned against incurring any potential liability, especially outside of their defined scope of work. But can innovation (and leadership) flourish without risk? And who should bear that risk? The client who benefits from it or the provider of the service? The operative word is risk. Engineers are often called upon to manage (constrain) their exposure to risk and are cautioned against incurring any potential liability, especially outside of their defined scope of work. But can innovation (and leadership) flourish without risk? And who should bear that risk? The client who benefits from it or the provider of the service? We frequently criticise risk-averse clients who try and pass their risk and liability to the engineer in an unreasonable manner. Many central and local government bodies are increasingly focused on passing liability to the service provider. This has been exacerbated and embedded by leaky building issues that were closely followed by quality and performance issues raised around the Canterbury earthquakes. Apart from the political angst, these matters cost government and local authorities significant money in related payments. A user-pays philosophy has expanded and morphed rapidly into a contract-driven service provider liability strategy. It is noticeable that after the Royal Commission released its Canterbury findings, there was yet further shedding of public and private sector appetite for carrying any risk and liability.

That continues to be the situation. If clients, building consent authorities (BCAs) and government bodies continue looking for any repository in which to cast their own risk and liability, where is the opportunity for engineering innovation to be nurtured and grow strong? The government desires more innovation within industry, but can also be responsible for shackling and inhibiting its evolution through prescriptive or poorly conceived legislation. Similarly, local authorities are able to stifle the birth of innovation in bureaucracy and onerous processes. The public sector client must be prepared to pay for, or share, associated risks to nurture innovation and new ideas. Proportionate liability would be a major improvement. Somebody has to show leadership and move forward to recognise new behaviour patterns to encourage progress in adopting alternative technological and design solutions that provide better outcomes. Engineers are among the risk-averse parties in this repetitive same-as culture that retreats from confronting innovation head on. But they also have the capability and skills to create and lead a wave of innovation in the industry, and develop new advances in social infrastructure as they did in the 19th century.

Our vision ACENZ aspires for its members and the engineering profession to be recognised as trusted advisors. This goal applies to all arenas in which engineers operate – public, private and commercial. We are focusing on leadership values and objectives in addition to professional competence and performance. Only by demonstrating courage, innovation

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and robust leadership will engineers gain true recognition and respect, and be considered as trusted advisors to industry, government and the public. Engineers in central Europe and Asia formally carry a professional title ‘engineer or ingeneur’ as would a doctor of medicine. They introduce themselves, and are introduced, as

The government desires more innovation within industry, but can also be responsible for shackling and inhibiting its evolution through prescriptive or poorly conceived legislation. ‘Engineer Mr So & So’. They are proud to carry their title and are regularly consulted on matters of public interest and are often quoted in the media. The Kiwi attitude of being backward in coming forward as the face of engineering means we are often only heard when something goes wrong, or when somebody wants to point a finger at those who seldom fight back. ACENZ has achieved the status of being a leader in government and industry circles. We are frequently called upon to provide input and advice to government, councils, clients and fellow industry bodies. However, for influence to grow and for related professionals to escalate in public status and recognition, it is time for engineers to stand up and say: “We are proud to be engineers, we are not afraid of leadership, and we will help you.” CP

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Machinery – working in collaboration ANDREW CRANE, PRESIDENT, NZ EQUIPMENT SUPPLIERS ASSOCIATION

There is no work without the machines to perform it, and the country’s equipment suppliers are the indicator for the health of the industry. AS MANY CONTRACTORS will know, the quarry industry is often left The New Zealand Equipment Suppliers Association (NZESA) represents 11 full member supplier companies as well as a further eight associate member companies. Our full members are made up of companies that sell, service and hire well-known brands of construction, forestry and mining equipment. Our associate members include both locally owned and international suppliers of attachments for construction equipment as well as other service providers. Following on from a record year of equipment sales in New Zealand in 2014, sales of equipment in 2015 were once again very strong with 1556 units being reported by the NZESA from January–September 2015. This is around eight percent lower than the total number of units sold in the same period in 2014, which is predominantly as a result of the slow-down in the forestry and agricultural sectors that we saw earlier that year. However, due to the continued high levels of construction activity throughout the country, sales of equipment to the construction sector actually increased by three percent compared with the same period in 2014.

“With strong construction activity and several large infrastructure projects that are happening around the country it is believed that sales of new construction equipment will continue to be supported.” Another trend that was seen in 2015 was the growing demand for construction equipment in the Auckland region, which recorded the largest demand for equipment in the country. Auckland has now taken over from Canterbury, which has been the largest region for sales from 2011–2014 following significant demand for equipment post the earthquake. With strong building activity and the need for more underground services, the sales of compact excavators were also very good again in 2015. Following the last two years of very strong sales for new construction equipment, in 2016 we are potentially looking at a slight drop off in demand. However, with strong construction activity and several large infrastructure projects that are happening around the country it is believed that sales of new construction equipment will continue to be supported.

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Internationally, demand for construction equipment is forecast to slow in 2016 as falling commodity prices cool customer investment plans. Lower commodity prices have had a particular impact on the sales for mining equipment and a major effect on the sales of construction equipment to China. The 2015 year saw an increased emphasis on equipment and attachment suppliers having to meet more stringent health and safety requirements around machine specifications and machine familiarisation training. Equipment suppliers are now continually assessing the health and safety compliance of the equipment sold to customers across a wide range of industries and job sites. With so many additional requirements, the NZESA has been working towards assisting members by sharing information on what specifications and procedures are required to meet the new standards as well as collaborating with other industry bodies. This collaboration has included working with Civil Contractors NZ, the Crane Association and WorkSafe on an amendment to Health and Safety in Employment (Pressure Equipment, Cranes, and Passenger Ropeways) Regulations 1999. Following discussion amongst these associations, it was determined that hydraulic excavators with an operating weight of seven tonne and over being used as a crane were required to meet the regulations in the code of practice by the start of this year. The NZESA also values the importance of putting input into the International Standards Organization (ISO) as more ISO standards become adopted here. With our innovative industry for attachments for construction equipment we are fortunate to have input into the ISO standards ISO/DIS 13031 Earth-moving machinery – Quick couplers – Safety. Matthew Calvert, from Wedgelock Equipment, has been on the ISO Committee for ISO 13031 and has provided a significant contribution to the design of the new standard. The NZESA has also provided funds to Standards NZ with the purpose of providing feedback to the ISO Technical Committee for TC127, SC2 and SC3 for the standards for earthmoving machinery. We see strong benefit of continuing this support as it provides a Kiwi view on international standards for safety issues with earthmoving machinery. In 2016 we would like to further develop the collaboration we have with industry associations and WorkSafe to ensure we can provide a meaningful contribution to new requirements for the industry that can be utilised nationally. CP

Construction technology predictions RYAN KUNISCH, DIRECTOR OF GLOBAL MARKETING / PRODUCT MANAGEMENT, TRIMBLE.

This year technology will continue to provide increased accuracy, flexibility and jobsite safety, while also further connecting the field to the office and, ultimately, helping construction companies build better products, faster. SPECIFIC PREDICTIONS INCLUDE Building Information Modelling (BIM) and building a Constructible Model. For years, construction companies have realised the benefits of modelling software. These days it’s fairly typical to see companies using software to take third-party information from a design package and create a model for use in the field. The next generation of civil engineering and construction software will provide a much broader scope of capabilities. The goal is to build a Constructible Model with rich “intelligent” data that will serve as the foundation of how contractors plan and execute construction projects. With intelligent modelling, users can add and remove information on the fly while simultaneously looking at multiple ways to perform construction work instead of making manual modifications. The ability to build constructible models is significant because it will enable designers and engineers to run multiple scenarios quickly and easily that accurately translate to a constructible model that contractors can effectively build against. In addition to building and sharing high-quality models, modelling technology is also evolving to allow design scenarios to be visualised beyond the confines of 3D. Better-integrated camera systems that capture 360-degree digital panoramas and geospatial information will share information with 3D modelling software packages. Pairing this sort of interactive modelling with ‘intelligent’ data frees engineers and architects to quickly analyse changes and “what if” design scenarios in the context of the physical environment. The potential impact is huge for saving time on rework, accelerating the building phase, and ultimately producing higher-quality projects.

A ‘connected’ worksite In 2016 and beyond, the construction industry will continue to see technology that brings more visibility and connectivity across a project. The ‘connected’ worksite continues to develop throughout the entire construction workflow. Today, contractors can take a plan that was created in one software application and use it in another application to track how teams are performing against that plan. As the office becomes more connected to the field, the need intensifies for a more holistic view of the job site, each person, and every machine’s progress to plan. Additional machines, assets and

individuals are required to connect into the GPS-enabled digital job site ecosystem. With a digital construction site, contractors can optimise earlier project planning phases and close the loop between real time information from the field and the office. Developments in this area will offer improvements in planning and more up-tothe-minute scheduling.

Increased automation and training Keep an eye on the push to integrate GPS or GNSS positioning technology beyond the surveyor and the machine. GPS is more than just the data point it produces; the value it provides is its application to quality, progress, increased efficiency and safety on the construction project. Effectively harnessed, these factors will drive competitive advantage for any construction business. With an aging workforce and tighter integration of GPS technology and construction equipment, the industry will also continue to see an emphasis on providing more education and training opportunities for individuals earlier in their career path. Scarcity of experienced machine operators in the construction space makes this particularly significant. With a greater emphasis on training, less experienced operators proficient in machine control technology can save contractors money by performing higher accuracy work ahead of schedule. Using machine control and 3D design models in the cab of the machine, operators are able to become more productive and self-sufficient, and are able to grade more accurately the first time around.

The big picture When it comes down to it, even the most sophisticated and cutting-edge construction technology is only as good as the people who are using it. Contractors who value their personnel and provide technology training early and often will see the biggest benefits on the job site. The future looks bright for contractors who make an effort to add more value to their machines, while also empowering everyone on the jobsite. With the ability to build meaningful constructible models that crews can work from more productively and safely, contractors will be able to optimise workflows in terms of planning, design, scheduling, construction and maintenance better than ever in the year ahead. CP

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Design-Construct – a consultant’s view STUART TUCKER, GENERAL MANAGER, CIVIL INFRASTRUCTURE, BECA

Stuart Tucker explains a clear trend showing increased demand in the infrastructure construction sector for the next couple of years and what this means for contractors. THE ONSET OF THE NEW year is traditionally a time for reviewing the achievements of the past year and looking to the opportunities in the coming 12 months. For me personally, seeing Alice breakthrough at Waterview was a major accomplishment in 2015, both for those involved and for the industry at large. In Auckland, the Council debate regarding its long-term infrastructure plan culminated in a confirmed and budgeted capital works programme – a watershed moment for the city and a major step forward. Council’s updated 10-year plan identified $4.8 billion in road and footpath projects, $3 billion in public transport projects and a $4.7 billion spend in water and wastewater projects. Across the country, the infrastructure construction sector continued to go from strength to strength. The Transport Agency’s 2015-2018 National Land Transport Programme shows a total spend of $13.9 billion, an increase of 15 percent on the previous 2012-2015 programme. This includes $6.4 billion for the State Highway network and $4 billion for local road infrastructure. The programme also targets a 21 percent increase in spending on public transport initiatives to $2 billion. When these projected spends are combined with a raft of Crown and local government agencies across the country, there is a clear trend showing increased demand in the infrastructure construction sector for the next couple of years.

What does that mean for our business? I recently completed a review of our design-construct projects in the infrastructure sector over the past 10 years. While we have seen a substantial increase in revenues from design-construct projects – the data indicates a fivefold increase in the past five years – profitability remains well below our business as usual result. Further analysis suggests our efficiency is increasing as we secure more work but it remains a tough and challenging market. Discussion at the pub with my construction mates suggests this trend is consistent with what they are seeing in their businesses. The national infrastructure capital spend has also reached a level where international partners can participate more effectively in the domestic market. New entrants are bringing new skills and new practices – they’re also increasing competition and pushing the local industry hard. Of course, profitability is not the only performance measure that we need to think about. A recent workshop with our senior design-construct team leaders re-confirmed for me how the

CONTRACTOR PERSPECTIVES 2016

design-construct sector provides fantastic career opportunities for those willing to put in the effort. The work is demanding – perhaps the most challenging in the sector for designers – but also deeply rewarding. Many told stories of significant stretch in key roles that led to development of real capability, personal growth and rapid progression. From a business perspective, the increasing number of larger projects provides great profile

While we have seen a substantial increase in revenues from design-construct projects – the data indicates a fivefold increase in the past five years – profitability remains well below our business as usual result. Further analysis suggests our efficiency is increasing as we secure more work but it remains a tough and challenging market. for firms and their employees that can help in winning the next job. Those big jobs also provide greater certainty around base workload, which helps mitigate some of the variability we see in other sectors. So what will increased demand in the sector mean for the industry in this coming year? Procurement teams are under real pressure to get their programmes out to market and we have seen a number of client agencies bolstering their procurement teams in advance. For firms, the sequencing and timing of bids remains challenging, with overlapping bid programmes placing significant demands on key resources. I suspect this year we may see firms taking a more considered approach to the bid/no-bid decision before committing teams to expensive bids. In addition, I see the cost of bidding remaining a vexatious issue. Despite feedback from industry, the cost of bidding has increased as owners demand greater certainty over product. While it is perhaps understandable from an owner’s perspective, it is contrary to industry practice across the ditch where bid costs are lower and tender submissions greatly simplified. Anecdotally, bid costs in North America and Europe are lower again. When coupled with win rates and deferred reimbursement, the cost of

bidding is a significant impost on the winnable margin available at tender. Of course, remedies such as increasing stipend payments, reducing submission requirements and reducing bidder numbers may not necessarily be favoured by owners. The continued struggle to find and retain talented people in key roles also looms in the coming year. That fivefold increase in revenue comes with a fivefold increase in the numbers of design team leaders, design managers and key discipline leads. While we have programmes in place to meet the challenge, it is an ongoing effort to recruit and retain key talent. Itâ&#x20AC;&#x2122;s a challenge for the sector â&#x20AC;&#x201C; not just the design professionals. Iâ&#x20AC;&#x2122;ve been in close contact with a number of projects grappling with issues that stem from having under-resourced or inexperienced teams, from the bid phase through to the delivery phase. A key issue facing our design teams is getting timely and informed inputs as the design develops, typically early in the delivery programme. Not only does it impact our own effectiveness, it often hampers downstream delivery as constructors are faced with different constructability requirements than those assumed in the design.

The inevitable changes result in increased rework, increased cost and lengthening programmes. Finally, I have a growing concern that there is a gradual erosion of the strong relationship basis on which our sector has been founded. The size and unique nature of our market has meant that relationships have tended to be highly constructive. This has represented a significant advantage, particularly when compared with other jurisdictions. More recently however, I have observed a more transactional approach to critical processes, which I suspect is being driven by increasing competition, increased costs (relative to budget) and reduced margins. In some instances, responsibilities are being misaligned and criticism misplaced. It can get personal, and I know of two senior and very capable design team leaders who turned their backs on the sector this past year because of it. On a more positive note, the sector is delivering excellent value for owners and truly world-class projects that both industry and owners can by rightly proud of. Long may that continue. CP

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On the job front JASON WALKER, MANAGING DIRECTOR OF HAYS, NEW ZEALAND

Recruitment activity in New Zealand’s civil contracting industry certainly experienced a monumental shift in focus in 2015. CIVIL JOBS ARE STILL booming but it is land development, not SCIRT (Stronger Christchurch Infrastructure Rebuild Team) work, that is now underpinning job activity. Off the back of the SCIRT civil workload, our civil jobs market has been very active over recent years. During this period there’s certainly been an abundance of work and high demand for skilled civil professionals. But we’re now starting to see a slowdown in SCIRT jobs, with the major civil projects forecast to conclude by the end of 2016. Vacancy activity will remain high in the civil jobs market though as civil projects resulting from the expanding residential and commercial construction sectors across the country take the place of SCIRT work. Land developments and subdivisions, especially in Auckland as well as on the outskirts of major cities, now underpin the civil market. In addition, commercial property developers have committed to large scale projects in Auckland, which is adding to the active market.

We continue to see high demand for a range of civil professionals. However the challenge remains the ongoing shortage of experienced professionals, especially at the intermediate level. There’s also movement in the three waters sector of the market as subdivisions create more infrastructure needs. We’re also started to see – and this will be even more apparent in 2016 – growth in demand due to pending government infrastructure projects. Add the strengthening of existing buildings and large infrastructure projects such as new roads and bridges, and civil remains a very active market for jobs in New Zealand. As a result we continue to see high demand for a range of civil professionals. However the challenge remains the ongoing shortage of experienced professionals, especially at the intermediate level. In terms of specific skills in demand, quantity surveyors with relevant experience are needed. While there are a lot of entrylevel candidates, there is an acute shortage of candidates with experience.

CONTRACTOR PERSPECTIVES 2016

Estimators with New Zealand experience are also sought. Many estimators move out of this role, adding to the candidate shortage. For this same reason, we’re also seeing a shortage of senior estimators in the market. Demand is equally high for engineers at the intermediate level. A reduction in the number of students studying civil engineering several years ago has led to today’s shortage. In particular demand are candidates with design and infrastructure experience in highways, roading, three waters and land development. Such skills are needed nationwide. Project engineers are sought too for civil projects, while geotechnical engineers are needed to manage ongoing earthwork, foundation design and investigation across the country. Mechanical and electrical building services engineers are also sought. This is due to national fit-out and refurbishment work across the nation, linked with commercial office space and government-related projects and seismic buildingstrengthening work. Land surveyors are needed due to national land development and infrastructure project work for housing developments, subdivision work and also private developers. We’ve also seen the demand for transportation engineers increase with a lot of new projects resulting from subdivisions in the North Island. Structural revit drafters are in strong demand as projects are nearing sign off, while intermediate structural seismic engineers with New Zealand experience are sought. Civil trades and labour is also needed, especially ticketed machine operators and New Zealand registered plumbers, electricians and civil certified drain layers. This demand will increase given the amount of subdivision work underway, large roading projects and earthworks. In other trends, we’re seeing higher demand for candidates with 3D software skills as this has become an industry standard, but there is a shortage of candidates in this area. Cultural fit has also become more important to employers when they recruit. That’s why employers now ask for a candidate with not only the necessary technical skills but also the right cultural fit. They are also more willing to consider overseas candidates, especially those from Australia, due to local candidate shortages. Another trend is that contracting is being seen as a viable longterm career option for candidates across the entire construction and property market, rather than an occasional opportunity.

Candidates are aware of the ongoing demand for their skills and the broader range of experience and contacts they can gain from contract work. Looking ahead, during 2016 we expect salaries to be pushed up in response to our skill shortage. We also expect employers will come to recognise that more of a concerted industry-wide effort needs to be made to attract young people into a civil career. One way to do this is by promoting apprenticeships. The BCITO, the largest provider of construction trade apprenticeships in New Zealand, provides a gateway guide for schools to promote apprenticeships and provides information to careers advisors and teachers supporting pathways into the industry. However despite this, scholarships and awards in colleges are still heavily biased towards recognising students moving on to degree courses. Although it is improving, there is still a great deal of work to be done around actively promoting apprenticeships through scholarships and awards, similar to what is occurring with graduate courses. A programme to reduce the stigma attached to vocational training over university study would also help attract more

young people into the industry. Interestingly, the Christchurch rebuild, and the ongoing employability of many tradies during the downturn, has helped to reduce the stigma over the past two to three years. People have seen that tradespeople were still needed during the downturn while many degree-qualified professionals saw the demand for their skills drop. In addition, most people know of at least one person who has graduated in softer disciplines, such as fine arts or social sciences, who struggled to find work in their field. In our increasingly technologically sophisticated world of work, apprenticeships are delivering entry-level candidates who are job-ready, so in 2016 we hope the industry does more to promote apprenticeships to young people as this will help ease the skill shortage long-term. â&#x20AC;˘ For further information on current recruitment trends, or to discuss your next move or new hire, please contact Hays on 09 309 2883 (Auckland), 09 525 1333 (South Auckland), 04 473 6860 (Wellington) or 03 377 6656 (Christchurch). For the latest recruitment news you can find us online at www.hays.net.nz, connect with us on LinkedIn or like our Facebook page. CP

CONTRACTOR PERSPECTIVES 2016

RESOURCES

Industry and the broader economy DR GANESH NANA, CHIEF ECONOMIST, BUSINESS AND ECONOMIST RESEARCH (BERL)

Construction sector good times continue, but, for how long? Dr Ganesh Nana puts it into perspective.

CONSTRUCTION ACTIVITY continues to fuel activity across the

economy. Further, with the dairy sector boom having come to a grinding full stop as international prices plummet, the construction sector is now pretty much on its own as the engine of the country’s economic growth. That’s a huge responsibility for one sector. But looking at some of the numbers, the sector is thriving and seems to be feeding on this burden.

In particular, the sector continues to grow noticeably faster than overall average GDP, while employment numbers are up strongly and are now well above any level experienced over the past two decades. For the record, average economy-wide GDP growth for the past three years has been 2.6 percent per annum, while the construction sector GDP has grown at a spectacular 10.1 percent per annum over the same period. On the people side, there are now over 225,000 employed in the construction sector – close to one in 10 of all jobs across the economy. This contrasts with the turn of the millennia when construction sector jobs numbered around the 100,000 mark, or about one in 15 of all employed economy wide.

CONTRACTOR PERSPECTIVES 2016

However, questions remain as to just how real is this boom? Alternatively, how much is essentially a catch up of past deferred maintenance? Indeed, there is a view that we are now essentially paying for the ground lost during the 1990s when we swapped a fiscal (government budget) deficit for an infrastructure deficit. This perspective argues that ignoring infrastructure for any lengthy period of time inevitably results in a bigger bill sometime later. If so, the outlook for construction sector activity is indeed bright, as the ongoing catch up continues to pile up construction order books. That may be a rose-tinted view of the sector, but it is clear that the appetite for long-term infrastructure investments has improved in both the public and the private sector. The prospect of relatively low interest rates for much longer (a fact that many are only now coming around to accept as an inevitability) assists in making such an appetite increasingly ravenous.

In terms of the square metres of consented non-residential building area activity (which is an indication of demand over the short-to-medium term), there is currently double-digit percentage growth in the hotels and accommodation, storage, health, education, storage buildings, and shop building categories.

Further, while much of the headline news is dominated by the Auckland building programme (transport, housing, retail, and related), communications, facilities and business plant investment remains solid across other regions. For example, the Bay of Plenty, Gisborne, Hawkes Bay, and Marlborough regions are running at more than 50 percent higher than 2014 in terms of area consented for non-residential building activity. Consents in Canterbury and Otago are up over 30 percent. The boost in hotels and accommodation building activity is most noticeable in Canterbury and Otago, in line with the postquake recovery (and now boom) in the tourism sector on the mainland. At the same time, a lift in activity in storage building is most noticeable in the Bay of Plenty, Hawkes Bay, Otago, and Marlborough regions. This is consistent with the buoyant horticulture sector of

There is a view that we are now essentially paying for the ground lost during the 1990s when we swapped a fiscal (government budget) deficit for an infrastructure deficit. This perspective argues that ignoring infrastructure for any lengthy period of time inevitably results in a bigger bill sometime later.

the last couple of seasons, as apples, kiwifruit, and avocado harvests and returns soar to historic highs. The ongoing expansion of the wine export industry (now close to an annual $1.5 billion) is no doubt a factor here too. Of course, residential housing adds to this pie for the building sector with record net inwards migration adding close to 25,000 families over the past year. Add in the natural increase in the population and the 26,000 consented new dwellings over the past year is barely enough to stand still when viewed in terms of supply/demand balance considerations. So, is there a risk that these ‘good times’ might suddenly cease?

From my perspective there is a low probability; but if so, it won’t be fundamental demand considerations that will be the cause. The infrastructure and housing catch up has some way to go yet. And, as noted above, the medium-term outlook for interest rates remains lower for longer because inflation pressures are invisible at best. Despite what finance and banking sector commentators may want you to believe, overall headline inflation is struggling to get to an annual one percent. Producer prices have barely moved in the past year. And inflation in prices of capital equipment (including construction materials, but excluding the residential building sector) remains close to an annual two percent. Further, global non-fuel commodity prices are some 20 percent below those of a year ago – a plummet that is even larger if one were to include oil. So interest rates (domestically and globally) are set to concentrate on the problems of deflation rather than inflation. Consequently, if the building sector good times were to sour, potential causes would arise from the consequences of deflation. In particular, if the global economy turned notably dark it would cause increasing difficulties for our export sector and so indirectly impact on construction sector activity. From this perspective, Kiwi eyes are firmly on the health of the Chinese economy. Unfortunately, however, we have little power to influence that outcome. Another source of potential difficulty arises if the policy levers (interest rates and government spending) took fright of ongoing expansion and applied the brakes prematurely. We saw this with the ill-thought interest rate hikes through the latter half of 2014. Alongside this consideration, I would add limits to the capacity of the construction sector to meet further expansion. In other words, has there been sufficient long-term investment in workforce capacity and capability? Without such investment, the sector is more vulnerable to short-term economic (or policy) cycles. I am reasonably optimistic that the sector is using the current boom times to invest in developing a trained, skilled, capable workforce and so provide a platform for improved long-term profitability. However, I will be searching for evidence over the coming year to check whether or not my optimism is well founded. CP

CONTRACTOR PERSPECTIVES 2016

RESOURCES

The legal perspective SAM MCCUTCHEON, SOLICITOR, AND ARIE MOORE, ASSOCIATE KENSINGTON SWAN’S CONSTRUCTION TEAM Sam McCutcheon

Arie Moore

Sam McCutcheon, and Arie Moore, review the year that has been and the year ahead. AS WE ENTER 2016 it is worthwhile reflecting on the past year and

there have been a number of developments in the construction sector that have helped to shape the current industry position. There is no shortage of reports which discuss the construction industry as the star of the economy. These generally highlight areas of concentrated growth in Auckland and Christchurch, although other regions have also been developing in their own right. Looking forward, the prediction is towards sustained growth, especially in infrastructure as the government and developers look to upgrade current assets and prepare for future expansion. On the legal front 2015 was marked by three areas, all of which coincidentally begin with the letter L: legislation; liquidation; and liquidated damages.

Legislation The amendments to the Construction Contracts Act 2002 are some of the most significant legislative changes we have seen since the Act was introduced. We provided a summary of these changes in the November edition of Contractor and while not all of the changes come into effect immediately there are a few amendments that have applied from December 2015. One of these is the requirement to serve a prescribed notice with ‘all’ payment claims for contracts entered or renewed after December 1, 2015. This must now be complied with. Further significant changes include the broadening of the Act to include designers, engineers and quantity surveyors that will occur from September this year, and the much-discussed retention scheme that will apply from April 2017. There are a number of questions around this retention trust scheme and these are likely to be answered in 2016.

Liquidation Liquidation received a high level of judicial attention in 2015. First in the Hiway Stabilizers case, the Supreme Court provided clarity around when a contractor will have given value in relation to the voidable transactions regime. This case clarified that the good faith defence in section 296 of the Companies Act 1993 is still available where a contractor has provided goods or services before receiving payment from the insolvent company. This has been a welcome decision for the contracting industry as it has reduced the scope of claw back by liquidators. In the second case, the High Court provided comment on the voidable effect of direct agreements between financiers, developers and contractors. In this case the liquidators of a

CONTRACTOR PERSPECTIVES 2016

development company were able to recover a payment that was made directly to the contractor from the financier (ie, no money went through the insolvent development company). This has significant implications for project funding arrangements and contractors have less payment security under direct agreements than once thought.

Electronic project management software is commonplace these days and has proven extremely useful on larger projects. Building Information Modelling (or BIM) is beginning to have a major role in vertical construction and it is not a far stretch to see the value from this technology becoming widely used in the horizontal infrastructure sphere as well.

Liquidated damages Finally, a comment needs to given on the developments around liquidated damages, or LDs. You will be familiar with LDs in construction contracts. They are usually imposed on a contractor who does not complete in the time specified. The test of whether an LD amount is enforceable has traditionally been determined by assessing whether the amount was a genuine pre-estimate of the principal’s loss; if it was not, the LD amount was held to be a penalty and unenforceable. Recently this has been fundamentally changed by the UK Supreme Court. Instead the Court took a new approach and assessed whether the amount of LDs was ‘out of all proportion’ to any interest in enforcement of the obligation. The Australian court system is currently hearing a case based on similar principles in relation to banking fees and it will be interesting to see whether the Australian courts adopt this UK approach. In our view the UK approach is a welcome decision. It represents a commercially pragmatic approach that preserves parties’ freedom of contract. This UK decision has not yet been considered in New Zealand although we hope the New Zealand

courts will adopt a similar direction if the opportunity arises in future.

The year ahead Putting aside the CCA amendments, the obvious legal change will be in Health and Safety. This is looking to impose much wider implications on a much broader group of people (including company directors). If you havenâ&#x20AC;&#x2122;t got on top of these pending changes then this would be a worthwhile new yearâ&#x20AC;&#x2122;s resolution. Looking a bit wider we can expect technology to play a more important role in projects. Electronic project management software is commonplace these days and has proven extremely useful on larger projects. Building Information Modelling (or BIM) is beginning to have a major role in vertical construction and it is not a far stretch to see the value from this technology becoming widely used in the horizontal infrastructure sphere as well. In terms of emerging technologies, prefabrication is fast becoming a cost-effective way to reduce build time and cost. While there is currently limited use of this in civil works it presents an innovation to watch with interest. It is likely that project funding will be under review following

the liquidation decision mentioned above. As demand for construction services grows principals are continually looking for innovative ways to finance developments and 2016 is likely to see further variations to the traditional funding models. One final area that is long overdue for a shake-up is dispute management. Disputes can be costly and time consuming; the more disputes that can be minimised the more successful a project will become. While dispute management begins with quality contract drafting, a number of other mechanisms are being adopted to reduce the occurrence of, or impact from, disputes. Two developing measures are the use of dispute resolution boards, or dispute avoidance boards. These can take on a number of different shapes and forms depending on the contractual and project requirements, although the primary objective is to resolve (or avoid) disputes at an early stage. The idea behind these mechanisms is to present the parties with an informed, independent opinion at an early stage of disagreement. This initial direction gives the parties an indication on the likely outcome and can refocus their intentions on achieving the project objectives. Any way you look at it the construction industry continues to be an exciting area to be involved in. CP

CONTRACTOR PERSPECTIVES 2016

RESOURCES

A new industry qualification Late in 2015 the Civil Trade certification programme was launched with the first 14 civil infrastructure workers becoming industry qualified tradespeople. THE NEWLY CERTIFIED group was made of workers from

throughout the country, working for industry stalwarts like Fulton Hogan, Fletchers, Downer NZ, City Care, Andrew Haulage and Higgins Contractors on projects including Auckland’s Waterview Connection. Their achievement, recognised at a presentation at Parliament, signifies the beginning of a new era for the civil industry. Up until now, unlike building, plumbing and electrical workers, workers in civil infrastructure, in jobs such as road construction and pipe installation, had no industry wide, transferrable trade qualification. Now civil workers effectively have an apprenticeship available that allows them to study and work at the same time, while accumulating hours towards their trade certification. This establishment of a formal certification, recognising people working at tradesperson level that are both qualified and highly skilled in civil constructing and maintaining civil infrastructure, is a significant step forward for the industry. Civil Infrastructure is one of the largest industries in the country, made up of 600 businesses and 40,000 employees nationwide, with a $20 billion annual turnover. The Civil Trades Certification Board was set up early last year to oversee the initiation of the new trade regime, which has wide industry support and was developed through Civil Contractors New Zealand in partnership with Connexis, the industry-training organisation for the infrastructure industry. Inaugural chair of the Civil Trades Certification Board and CCNZ chair, Dave Connell, says the trade certification fundamentally changes how the civil infrastructure industry works. “A regulated trades regime sees certified tradespeople take ownership and provide the craftsmanship required for delivery of a product or construction activity. It will be game changing for the industry and the people who work in it.”

Richard Leach from Higgins, one of the first industry people to be recognised with the Civil Trade certification.

Dave says the trade certification will empower workers, who will have a recognised and transferrable trade behind them. For employers it means more engaged workers who are more productive and safer, and with an expected streamlining of on-site work practices, he adds. Connexis ITO chief executive Helmut Modlik calls the establishment of the Trade Certification Board a significant milestone. “This is very exciting for the industry and marks the beginning of a steady roll out of qualified workers with transferrable skills, which is of course beneficial to both workers and employees. Qualified people produce quality infrastructure. “The new qualification will also help attract workers to the industry now that it offers a clear career path. Introducing a trade regime for civil infrastructure has been something that has been wanted by the industry for a long time and it’s a significant step for both the industry and its workers.” CP

AQA ............................................................................................................. 19

Heaney & Co....................................................................................................13

Civil Contractors NZ............................................................................. 43

Hirepool...............................................................................................................3

Complete Reinforcing........................................................................IFC

Hynds Pipe Systems................................................................................ IBC

Connexis..................................................................................................... 17

NZ Institute of Highway Technology.....................................................11

Counties Readymix Concrete............................................................ 31

Prime Pump........................................................................................................7

Digga NZ.................................................................................................... 37

Taylorbuilt.......................................................................................................29

Ditch Witch NZ..........................................................................................8

Total Oil..........................................................................................................OBC

Glenbrook Machinery........................................................................... 25

Transdiesel.....................................................................................................32

Global Survey ........................................................................................ 26

Trimble............................................................................................................... 14

Gough Group...............................................................................................4

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