Fulton Hogan wins $260m DCC contract

Fulton Hogan has been awarded a major roading contract by the Dunedin City Council. PHOTO: PETER...
Fulton Hogan has been awarded a major roading contract by the Dunedin City Council. PHOTO: PETER MCINTOSH
Fulton Hogan has won a 10-year, $260 million roading maintenance contract from the Dunedin City Council.

The company will take over the contract in May from Downer, which has held it since 2016.

Fulton Hogan had held the previous contract until 2016, when criticism of its performance cleaning mud-tanks across the city — which was disputed by the company itself — was followed by the decision to award the contract to Downer.

At the time, it was a three-year contract worth $45 million, and losing it prompted Fulton Hogan to make about 12 staff redundant.

Council infrastructure services general manager Simon Drew said all interested parties went through a rigorous tender process which required them to "provide substantial evidence they have the skills, expertise and resources to deliver the required services to the city".

"The work to be done by the contractor is important for a major asset of the city.

"We’re pleased to award the contract to a local company which will make a significant investment in machinery, equipment and staff in order to meet the demands and expectations of our community."

Fulton Hogan regional manager Grant Sime said the company was "delighted".

"The significance is even deeper for us, given that Dunedin is the birthplace of Fulton Hogan and that, during the contract, we’ll be celebrating 90 years since Jules Fulton and Bob Hogan began our business here in Dunedin."

The contract was worth about $26 million per year and included resealing roads and footpaths, maintaining drains, culverts and mud-tanks, street cleaning, fixing potholes, maintaining road signs, grading unsealed roads, vegetation control and responding during emergencies.

It had been awarded for 10 years to April 30, 2030, Mr Drew said.

"While the contract is for 10 years, the council retains the right to reduce the term of the contract if Fulton Hogan is not achieving its key objectives and agreed performance measures, however, we are confident they will provide an excellent service.

"During the process, we made it clear that awarding the contract was not simply about the money but that quality of service was also important."

Council transport delivery manager Josh von Pein said that while Downer had lost the contract, he acknowledged the hard work they had done over the past four years.

Downer regional manager Anthony van de Water previously told the Otago Daily Times that the outcome affected about 30 full-time staff, who were said to be "disappointed", but Downer was "working with those impacted ... to help reassign them to roles within the wider Downer, Spotless and Hawkins family".

Mr van de Water said the company would continue to work with the DCC as an "important" customer on other contracts and transport, infrastructure and facilities-related projects in the city.

 

Comments

To 2016 FH had a 3 year contract worth $45m ($15m/year). This new contract awarded to FH is for $260m across 10 years, so $26m/year.

I’m not sure that’s an inflation based increase over the previous contract but I hope both parties are getting a good deal!

I bet they did. But readers of this resource don't care how inefficiently and how many hundreds of millions DCC spends and as long as no cycleways mentioned.

The priority is that the ratepayer gets the best deal. These sorts of contracts have always been overtly expensive. Ratepayers often seen as a captive cash cow. Rates go up, no choice for the ratepayer. Poor workmanship, no choice for the ratepayer. Diddled contracts, no choice for the ratepayer. DCC staff and it's contactors would do well to remember where the money comes from and serve their community with some pride and responsibility. Too many bums on seats and noses in troughs.

 

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