Contractor Fulton Hogan looks set to pick up a $65 million, seven-year maintenance contract for the Central Otago highway network.
The New Zealand Transport Agency announced yesterday it was negotiating a new contract with Fulton Hogan as the preferred supplier.
NZTA southern business unit manager Ian Duncan said the contract would be a "network outcomes contract'', which the agency had been introducing nationally over the past three years.
Central Otago was the second last to be put in place.
In the past there were contracts for "cyclic maintenance'', and separate contracts for vegetation, resealing and renewals.
The new contracts had a consortium of suppliers for all the work, and required a minimum subcontractor level of 20% of the contract value.
"With one contract for maintaining highways in the Queenstown-Lakes and Central Otago districts, the transport agency is expecting savings across the board.''
Fulton Hogan had formed a partnership with Opus Consultants, Whitestone Contracting Ltd and Base Contracting Ltd, the four companies set to collectively deliver the new contract, which covers 537km of highway.
Mr Duncan said Fulton Hogan had maintained the Central Otago highway network for the past five years, and had depots throughout the area and a good working knowledge of both the Queenstown-Lakes and Central Otago districts.
He said he was not concerned about the company having lost its Dunedin City Council road maintenance contract.
The company was criticised for its performance before last June's flood in South Dunedin, and recently dumped from its $39million contract.
In response, the company said late last month it had been unfairly maligned by the council over its performance cleaning the city's mud-tanks before the flood.
Mr Duncan said the network outcomes contract was a performance-based contract.
"There's quite a rigorous process that the contractors and suppliers have to go through to tender for these to be sure they've got a good team, and they've got the right methodology to approach achieving the outcomes we want for the networks.
"We're quite satisfied we've got a good outcome in this case.''
The new contract would take effect on October 1.
Approached for comment, Fulton Hogan said it would respond by email today.
