By Peter Silcock, chief executive, Civil Contractors New Zealand.
We released the results of the 2020 Construction Industry Survey on 2 September, research we partner on each year with Teletrac Navman.
It was no surprise to me that contractors said a more certain pipeline of central and local government infrastructure work would make the single biggest positive difference to their businesses.
Pipeline certainty is about providing the construction market a view of upcoming work so contractors, engineers and goods and service suppliers can gear up or down to meet to market needs by investing in the right people and plant for the work ahead.
To be useful, the pipeline information needs to include much more than an announcement about a project. It needs to provide detail on the project status. Is it proposed or funded? Is it consented? How will it be procured? What’s the planned timing of critical phases – design/engineering, consenting, procurement and construction?
The timing of these phases and other changes need to be reviewed and updated as the project develops.
Contractors are often cautious about project announcements because all too often they are overambitious and may not come to market when promised. Employing 200 people and spending millions on a pre-cast concrete plant for a project that’s not going to happen would not be good for business, and our recent experience with Auckland light rail is a perfect example of an overambitious campaign trail announcement, with other more recent announcements possibly falling into the same category.
Those in the industry see right through promises to complete large complex projects in one 3-year political term. If you’re serious about a project, you must be prepared to follow through with additional internal and external resources, complete clarity around project objectives and streamlined processes for consenting, funding, financing and mobilisation.
Having a clear, realistic and regularly updated pipeline of work has massive benefits for Councils. It means:
- You are likely to get more tenders for your work;
- Contractors, subcontractors and consulting engineers are more likely to align their investment in people, plant and systems to your future work programme;
- You can better align your project pipeline with other clients, e.g. Waka Kotahi or other local councils, for cost savings and greater benefits;
- You can ensure your own resourcing is better matched to your work programme;
- It is more likely your work programme will be delivered to cost and on time.
The NZ Infrastructure Commission’s Infrastructure Pipeline is emerging as the leading example of pipeline clarity. It is certainly the go-to place to get information on central government work and it’s great to see an increasing number of councils using it too.
If you are not contributing your projects to Infracom’s pipeline, the question is why not?
I encourage you all to add your projects and use it to get a better understanding of the market in your region, as well as increasing the recognition of your region’s needs in the Commission’s 30-year plan for our infrastructure needs.
Civil contractors do a lot of work for local government. In fact, around 45 per cent of their work comes from local government, with the remainder split relatively evenly between central government and the private sector.
My message is simple. You are an important client. We need to move past the current situation where contractors get the first meaningful indication of a project when tenders open. We need to work toward a position where well qualified and resourced contractors have confidence to invest in people, plant and systems based on your pipeline of work.