Civil Contractors New Zealand chief executive Peter Silcock reviews the challenges and wins of the past year and the changes the industry faces during 2016.
There were certainly some great highlights in 2015: The 30 Year New Zealand Infrastructure Plan released in August that identifies the need for a $110 billion investment in infrastructure over the next 10 years; NZTA’s announcement in July of a $13.9 billion programme of investment planned for our land transport system over the next three years (a 15 percent increase over the past three years); and the national and local governments starting to step up to the challenges of affordable housing and the infrastructure services they require.
So, is the contracting industry singing?
The answer is yes, in parts. While on one hand we are starting to meet the need for new infrastructure development, we seem to be standing still or losing ground on the maintenance of our existing assets.
The NZTA’s investment on road maintenance has significantly reduced over the past few years and there has been plenty of talk about “sweating” the asset. Many contractors I have spoken to say they are already seeing the impacts on our roads. While this is an “eyes wide open” decision made by NZTA, I am not sure that the public really understands what is happening and it will be interesting to observe the public and political response over the next few years.
The continued roll-out of the Transport Agency’s Network Outcomes Contracts has reshuffled the deck, and there have certainly been some winners and losers in 2015. Those results are having flow-on effects in terms of competition for other work, which impacts on all contractors.
Of more concern is the fact that there has not been any real progress in finding a way for local authorities to fund the massive investment required to upgrade, maintain and renew our aging 3 Waters (water, wastewater and storm water) infrastructure. In a number of areas the population is forecast to stall, or decline, and the proportion of retirees is growing, which means the challenges are simply getting bigger.
As an organisation, Civil Contractors New Zealand saw some great outcomes and major achievements in 2015. After 11 months of waiting for a decision, we hailed the Supreme Court decision on a liquidator’s powers to claw back payments made by an insolvent company to a contractor, as a victory for common sense.
The advocacy and support provided by contractors on this issue dated back to mid-2013 and the result was a huge relief to members that had helped to fund the appeal. The Supreme Court overturned an earlier Court of Appeal ruling allowing liquidators to claim back payments made by a company up to two years before its collapse.
The decision was a very important one for the contracting market and gives contractors the confidence to invest in new equipment, training staff and expanding their businesses to meet the growing demand.
The launch of the new Civil Trades regime by the Hon Steven Joyce back in December is a game-changer for the civil construction industry. For the first time people working in civil construction can obtain a formal certification recognising their skill, expertise and experience.
Seeing the first 14 Certified Civil Tradespeople receive their certificates from the Minister was a real thrill for the many people who have supported them, and for Civil Contractors New Zealand, which has worked to establish the new regime in partnership with Connexis.
The Civil Trades regime is a major building block for the industry. It will mean that more people will see the opportunity of a rewarding and meaningful career, not just a job, in our industry.
So what will 2016 hold for our civil contracting industry? The likely themes will be continuous change, people and relationships.
The changes to the Health and Safety at Work Act come into force in April 2016 and contractors will need to have strong worker participation systems in place. We all know that those systems and meetings need to be documented and recorded, but it will be up to each business owner/manager to make sure that we focus on ‘people not paper’. Don’t make those meetings a box ticking exercise. Talk about the most critical issues, engage your staff in their own and their workmates’ health and safety, make it part of their everyday working life and empower them to take action.
The Construction Safety Council’s new “ConstructSafe” competency framework and assessment tool will be launched in April to coincide with the new legislation coming into force. This is not another training programme, as the framework simply sets the level of competency that people need to have to safely enter a construction site (whether you are a carpenter, civil contractor or a timber salesperson). The system has been developed by the whole construction industry and is supported by an online tool that quickly assesses people’s competency.
ConstructSafe has been comprehensively tested in a variety of construction sites, large and small, horizontal and vertical. It creates a single competency standard and ensures that everyone on site has the knowledge to protect their own safety and the safety of their workmates.
As the additional investment by the NZTA comes into effect this year, the competition for skilled people across the industry will increase. Contractors need to focus on how they plan to retain their staff and remember that this is not all about money. Think about the development opportunities you are giving your staff, how you are recognising their expertise, how you are building a team culture. There would be no better way to recognise the skill, experience and workmanship of your staff than to register them in our new Civil Trades regime.
The other big event in 2016 will be local body elections.
The big question we have, is will those elections stimulate discussion about our aging civil infrastructure? Will we be able to break out of the focus on reducing debt and minimising rate increases to take on the costly challenges of renewing and developing our aging (yet invisible to the public) underground infrastructure? Let’s not hold our breath on that one!
Civil construction is a dynamic industry. Cycles of work, large projects starting or finishing, mergers and acquisitions, staff changes, new technologies and natural disasters … they will all have an impact in 2016.
Increasingly it is relationships that will carry a business through – relationships with clients, with staff, with subcontractors and head contractors, alliance and joint venture partners – they all contribute to successful businesses.
In today’s market, strong partnerships are a vital component of winning work and efficiently and effectively delivering quality infrastructure on time.
It is those relationships within, and outside your business, that will make your business more resilient and able to quickly and proactively respond to the challenges and the opportunities that 2016 offers.