Quake recovery leads the way

13 November 2014


New Zealand’s construction sector is one of its largest and most economically important, employing over 7% of the workforce and growing. It generates around NZ$30bn (US$23.4bn) of gross revenues annually, Chris Webb reports.

Grant Moffat, president of the Cranes Association of New Zealand (CANZ) was in bullish mood at September's Crane Industry Council of Australia (CICA) conference in Sydney, Australia. The much predicted return to power of the National Party has been well received by many business leaders, among them those in the crane industry, who see it as a green light to continued investment in the nation's infrastructure. "The National Party is a traditionally centre-right party led by John Key. Thankfully, [the] party supports business development and growth," he told a packed conference hall.

Established in 1975, CANZ represents a significant portion of the crane sector in NZ. Its members have a highly visible profile, resulting from a burgeoning investment in new build and rebuilding of the nation's heritage city of Christchurch, whose recovery from the catastrophic earthquakes of 2010/11 will continue for some years to come.

A high-impact sector, construction embraces house-building, underpins basic infrastructure and large building developments and since the earthquakes that devastated the Canterbury district has absorbed an unprecedented workload in the nation's second-biggest city.

Development in Auckland, the country's most populous city, is vigorously driving demand for more skills -- and construction plants -- than ever before.

Newly returned to office after the September elections, economic development minister Steven Joyce highlighted the importance of the sector to the economy. "Not only does it generate more than NZ$30bn (US$23.4bn) to the New Zealand economy, it employs 170,000 people, more than agriculture, forestry or fishing." The number of firms involved in the sector has grown dramatically over the last decade or more, a full 10,000 greater than in 2002.

Joyce continues: "This has been driven by construction services and residential building. With the Christchurch rebuild and Auckland city housing demand at an all-time high, the industry is experiencing unprecedented growth."

A massive NZ$10bn-plus (US$7.8bn) bonanza is on the rise across the city of Auckland alone. A series of infrastructure, education, road building, commercial, retail, housing and prison projects are going ahead, or in the pipeline, in what some analysts see as a catch- up after the global financial crisis. A critical shortage of residential accommodation, a rising population, requirements for better education buildings, consumer demand for bigger and better supermarkets, and extension of road infrastructure are just some of the drivers behind New Zealand's buoyant construction industry.

Following on will be a NZ$2.4bn (US$1.8bn) City Rail Link (CRL) and a similar investment at Auckland International Airport. Property purchases have been made to secure the CRL route but construction is yet to start, while at the airport planning is well advanced for its massive transformation.

Billion dollar league A string of projects are in the NZ$1bn (US$783m) league. Included in these is the Westgate town centre, which is now underway, the University of Auckland's NZ$1bn spend planned over the next decade, also well advanced, and the NZ$1bn Wynyard Quarter central business district (CBD) waterfront urban renewal. The latter will see hundreds of new apartments, a six-star hotel, new transport links, offices, shops and cafes take to the skyline. In addition, a NZ$1bn Britomart transformation, which is yet to see a big new group of office blocks or a new hotel, is on the drawing board. Now, demand has risen, money is easier to get and tower cranes dot the skyline.

The country as a whole is also basking in the glow of some of the most prestigious projects it has seen in recent years, despite the global retrenchment of, including its biggest ever highway project, the NZ$1.4bn (US$1.2bn) Waterview Connection, which is designed to complete the Western Ring Route in Auckland.

The Herrenknecht tunnel boring machine (TBM), which recently completed its _rst drive northward to Waterview, will be turned around over the next three months and re-launched to carry out its southbound journey early next year, building the second (northbound) tunnel. The project is being carried out for the New Zealand Transport Agency. 'Alice', the tunnel boring machine, broke into daylight last month at the end of her 10-month, 2.4km underground journey from Owairaka to Waterview. The twin tunnels will be the tenth largest in diameter in the world and the longest road tunnel in New Zealand.

The completed tunnel featured the installation of no fewer than 12,010 concrete tunnel lining segments, and the removal of 394,000 cubic metres of spoil.

At 90m long and weighing 3,100 tonnes, Alice is big. The cutting head and its three trailing gantries will be disconnected and each piece taken one at a time from the completed tunnel and turned using specialist cranes, in early 2015, before tunnelling resumes to construct the second tunnel.

The project involves the construction of 4.8km of a six-lane motorway to link State Highways 16 and 20, bringing relief to the city of Auckland and providing speedier access to the national roads network from New Zealand's primary international airport. It will significantly improve commuter routes.

Construction: a vital role "Construction has a vital part to play in our communities and its activity can be felt throughout the economy. From infrastructure and telecommunications to city and community development, it has a direct impact on the quality of life of all New Zealanders," minister Joyce continues.

CANZ's Moffat believes his members are more than ready for the challenge. "For the first time in New Zealand's history under Mixed Member Proportional (MMP) [where parties are represented in parliament as a proportion of those votes cast] one party has gained enough support to govern alone. The National party gained 48% of the vote giving it 61 seats in a 121 seat government. However it appears National will again secure the support of the Maori Party, ACT and United Future giving them a combined total of 65 seats.

First elected in November 2008, again in November 2011, and now about to start its third term, National is set, says Moffat, to lift the long-term performance of the economy through delivering better public services and driving economic growth, which will boost construction.

Rebuilding of Christchurch Moffat is also optimistic about regulation in the industry. He told Cranes Today: "Over the last quarter of a century, the New Zealand economy has changed from being one of the most regulated in the OECD to one of the least regulated.

With average growth in the economy of 2.7% projected to be 3.6% by March 2015, New Zealand is experiencing a growth driven by the Canterbury rebuild and a recovery in domestic demand. Recovering world demand as well as elevated commodity prices should provide assistance to export growth.

On the back of this growth, the next ten years should see an increase in infrastructure and commercial and residential building. The Canterbury rebuild and Auckland housing shortage will be the key drivers of this.

Since 2013, economic growth has spread across New Zealand. New Zealand's growth is mainly underpinned by an increase in construction as exchange rates strengthen and business confidence has increased to a 19-year high. This growth and confidence has also been assisted by a number of major infrastructure projects.

Road building projects "Waterview Connection is the largest road building project ever undertaken in New Zealand," Moffat explains. "But it is by no means the only large-scale project. McKay to Peka Peka (M2PP) is another large road building contract for a section of the Wellington Northern Corridor, and one of seven 'roads of national significance' fast-tracked by the government. This project creates 18km of four-lane motorway at a cost of NZ$630m (US$490m)."

Then there is Transmission Gully, the first ever Private/Public/ Partnership (PPP) for NZTA. Transmission Gully is a 27km-long four-lane highway to be cut through some of the most challenging terrain possible, with 28 structures to be built for the road to pass over. This road has been discussed and researched for over 90 years and has finally been awarded with construction to start this year and completion around 2020. The project is estimated to cost NZ$1bn."

"Growing business confidence has seen growth across the whole construction and infrastructure sector and this has resulted in a huge demand for cranes across the whole industry", Moffat says. "A trend for the last couple of years has been the increased demand for quality crane operators and riggers, this has seen a number of Kiwis return from overseas, and the ITO in conjunction with CANZ is working hard on recognition of prior learning to facilitate competent operators back into the New Zealand workforce. The pressure on this has heightened due to new detection and enforcement measures introduced by Worksafe NZ [the country's independent health & safety regulatory authority]. "Employment has grown for a sixth successive quarter, commercial building permits have increased and the exchange rate has strengthened in the last quarter. Sadly the stronger dollar is also affecting our export market, however the New Zealand economy is showing signs of continued improvement, with economists predicting a five-to-tenyear growth spurt which bodes well for our industry.

"WorkSafe NZ has a totally different approach to consultation and is looking to [CANZ] to provide guidance, putting [it] in a leadership role in setting the standards for the industry moving forward. All codes of practice and industry standards are being questioned and where appropriate have or are to be rewritten over the next few years. This also extends to best practice guidelines which a number of industries have been pushing for."

Worksafe NZ is also a fully self-funding government department, whose new approach to site inspections, enforcement and prosecutions is being felt by all contractors in NZ. Moffat continues: "Thankfully they are taking a very practicable approach and bringing in resources with industry experience who offer assistance and advice before the large stick!

"We are in the final stages of the rewrite of our crane safety manual, [which] has been almost two years in the making. The manual is designed for the crane operator with simple, easy-tounderstand language and material.

Industry, trainers and trainees all use it as their prime reference for crane operations.

"One of our main issues has been with the number of times and the time wasted for members' cranes after being pulled over on the side of the road by enforcement agencies. After discussions with the NZ Police, NZTA and Ministry of Transport we are commencing the re-introduction of Crane Weight Certificates which will provide the crane details including gross mass, photos of the transport-ready crane with all equipment and contact details. This should reduce the time spent on the side of the road by the crane companies.

"Two of the most critical pieces of legislation to our industry is the VDAM [vehicle dimensions and mass] Rule and the H&S in Employment Act which we are now involved in the review and rewrite of. The implications of these two pieces of legislation reflect critical areas of compliance.

"The VDAM has cranes treated the same as commercial road transport fleet, not cranes as such, so with this review we have a window of opportunity to segregate cranes as a separate entity. Fortunately the regulators agree with us and appear to be on the same page. The H&S legislation will impact on all industries particularly those in high-risk roles, for which there is now a 'High Hazards' section of Worksafe NZ, which again is a new approach.

"Currently we have crane operators doing initial unit standards training through the Industry Training Organisation and qualifying as a crane operator and then gaining practical experience on the job. Companies have to keep records of training for compliance purposes. CANZ has proposed a new over-arching licence system for operators, offering statuses as probationary, under supervision and full operation, renewable every few years, and this programme has gained tentative support from Worksafe NZ. The timeframe is yet to be determined, but this is an exciting opportunity for the industry and CANZ to lift the standard once more."