Tough time for builders in city

Major Dunedin construction companies, most already working in a limited way on the Christchurch rebuilding, say they will have to channel more Dunedin staff north because of the bleak construction outlook here.

While there are still mid-sized projects in the pipeline for the city and across Otago and Southland, the last of the city's large projects are well under way and few new ones are on the horizon.

Plans were unveiled last week for a $100 million waterfront hotel with a completion target of 2015, but tenders have not been called for that yet.

The University of Otago also plans to spend $50 million on earthquake strengthening over the next eight years.

Naylor Love managing director Don Stock said the outlook was tough.

"We are desperately keen for Dunedin to start building ...

"We have been in business 102 years and these are some of the toughest times we've seen."

The company employed about 100 staff in Dunedin, he said.

About 10 staff were now working in Christchurch, although Mr Stock said they had been reluctant to go.

"When we first raised it, no-one wanted to go.

"But when they understood that going was the lesser of two evils, they were quite enthusiastic."

The company had to match staff to work available and could not carry excess people forever, he said.

No staff had been made redundant yet, but "downsizing" was a possibility if more work was not secured in Dunedin and surrounds.

Amalgamated Builders Dunedin manager Richard Johnston said he was waiting for the $30 billion Christchurch rebuild to get into full swing to occupy Dunedin staff.

"We are scratching to keep our staff gainfully employed."

The firm was still working on the town hall development, due to be completed early next year, but the future outlook was "sketchy", he said.

"There doesn't seem to be much work coming up.

"It happens ... When people are nervous [about the economy], the first thing they do is stop spending.

"And the Dunedin City Council's money worries are another blow to the construction community."

While there had been no redundancies, Dunedin staff who left had not been replaced. Numbers had dropped from about 80 two years ago, to between 50 and 60 now, he said.

Mr Johnston said he was remaining optimistic.

"You have to buckle down and not feel sorry for yourself.

"You have to try and get out there and get your share of any work going," Mr Johnston said.

Lund South managing director Russell Lund said another branch of Lund already worked in Christchurch and Lund South had not been actively seeking work in that city.

Lund had been "extremely busy" on moderate-sized projects in and around Dunedin in the past 12 months, but he said with few major projects confirmed for Dunedin in the immediate future, it was likely his staff would have to be employed in Christchurch.

"All roads will lead to Christchurch, eventually."

Cook Brothers Construction director of business development Sam Rofe relocated to Christchurch six weeks ago.

He said about 30 staff, some from Dunedin, were working on about 50 projects in Christchurch and he expected numbers to increase to 50 by the end of the year. Cook Bros still had about 30 to 40 staff based in Dunedin.

Cook Bros had not chased major rebuilding work but was working with clients who had business interests in Christchurch, he said.

The projects were mainly smaller ones such as "triage" - assessing buildings and carrying out immediate repairs - and building refits to accommodate companies forced to move.

"These are not new builds yet.

At the moment, we are providing an essential service to keep commerce afloat."

Mr Rofe said Cook Bros handled mid-range projects and its forward workload in Otago, Central Otago and Southland was "absolutely stellar".

"Dunedin is our home, but Dunedin is too small a city, in terms of construction, to stick around. We have projects under way from Invercargill to Auckland."

The lack of confirmed construction work affects not only construction companies but subcontractors, engineers, architects and designers.

Some of those people were already working in Christchurch too, construction business consultant Graham Williams said.

Mr Williams was appointed three weeks ago by the Dunedin City Council to try to secure work for Dunedin companies on Christchurch's rebuilding.

He was in Christchurch this week for an initial round of meeting key players including the Industry Capability Network - the organisation set up through the Government's economic development arm New Zealand Trade and Enterprise and the Canterbury Earthquake Recovery Authority (Cera).

The "big boys", such as Naylor Love, were already working in Christchurch and Mr Williams said he would be trying to link smaller construction companies and subcontractors with companies and agencies needing skilled staff.

Because the rebuilding had not yet begun in earnest, the potential for work for local companies was enormous, he said.

"One builder I talked to has $70 million worth of work ahead.

"Everyone is saying the start of the rebuild is just around the corner, so Dunedin companies need to get geared up if they want to be involved."

- allison.rudd@odt.co.nz

Significant projects(with completion targets)
- Otago Settlers Museum, Queens Gardens redevelopment (Nov 2012)Town Hall/Dunedin Centre/Municipal Chambers redevelopment, Octagon (early 2013)
- Tahuna wastewater treatment plant upgrade, Tahuna Rd (Sept 2012)Countdown supermarket, Andersons Bay Rd (June 2012)
- Speight's Brewery redevelopment (Sept 2013)

 

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