Comment Contractor

McConnell Dowell – a view from the top

Roger McRae has spent most of his working life with McConnell Dowell. He talked to our sister magazine Local Government recently about the industry from his position as the company’s managing director, and this article is based on a transcript from that interview. BY ALAN TITCHALL

Roger McRae on Auckland’s Waterview Connection Project, “the Everest of construction.”
Roger McRae on Auckland’s Waterview Connection Project, “the Everest of construction.”

ROGER MCRAE HAS witnessed a lot of change in an industry that he says has “matured” since he started with McConnell Dowell 30 years ago. He was there during the Think Big projects and when the company listed on the NZ Stock Exchange by doing a reverse takeover of Hawkins. He was also there when, in 1991, the company moved its head office to Australia.

“When you operate worldwide and the bulk of your revenue is overseas, moving the head office out of New Zealand makes sense both commercially and logistically, so the company is headquartered in Melbourne,” he says.

The company also has regional offices in the Middle East, and Asia, while South African company Aveng Group, which is McConnell Dowell’s 100 percent parent, operates solely on the African continent. The New Zealand office, which is also responsible for work in the Pacific, employs in the region of 1100 staff.

Roger’s first job with the company was as a site engineer on a tunnel project in the backblocks of central Otago, not far from where he had been raised on a farm. In fact, he was the first family member to escape farming.

“I’ve still got a small block of land and a few sheep to remind me of why I didn’t go farming,” he quips.

The construction industry was just something he fell into after qualifying as an engineer.

“And I’m still doing it, and still loving it.”

C_June_2015_Pg18_2Asked to single out a career highlight Roger selects two current projects.

The first is Auckland’s Waterview Connection Project and what he calls the, “Everest of construction”. He chairs the project’s alliance board.

“It’s a $1.4 billion project of immense size, scale and complexity, with a lot of interaction with the community.

“To build a tunnel and motorway project of that size and scale … it just hasn’t been done in New Zealand before.”

The other project is the rebuild of Christchurch, where McConnell Dowell works alongside the Transport Agency, Christchurch City Council and CERA, and with other SCIRT partners City Care, Downer, Fletcher Construction and Fulton Hogan. Roger is a founding member of the SCIRT alliance board.

Partnering with firms that are competitors on other projects means breaking down organisational silos, he says.

“The thing that really helped us get over the line as part of the SCIRT alliance, and helped us to shed our individual corporate veils, was that we are there for the future of Christchurch and its people, and you keep testing your thinking about what’s best for the project, not what’s best for McConnell Dowell, Fletcher or Downer.”

Feedback has proven this approach works.

“We’ve got something like 85 percent of the public supporting what SCIRT is doing in Christchurch. And given the disruption to these people … to get that level of support from a community is really quite outstanding.”

This collaborative approach between alliance contractors is the way of the future Roger reckons and it is one of the areas where the industry has matured significantly.

“The collaborative style of working has been led by the NZTA. They were really the first to roll out the alliance contract delivery approach, and this collaborative style is catching on with local governments.

“Obviously the Christchurch City Council is involved in a collaborative working relationship with SCIRT, and we are also seeing signs that the Auckland Council is delivering collaborative agreements. The Lower Hatea Bridge project in Whangarei was another collaborative arrangement.

“It is a much more positive and empowering arrangement when you are sitting alongside the client, rather than some of the more structured master/servant relationships of the past.”

Health and safety

“The industry has also matured a lot in terms of health and safety and I have observed significant advances in safety practices over the past 30 years,” he says.

C_June_2015_Pg18_3McConnell Dowell was involved in the development of the Pike River Mine tunnel and went through a painful experience with the mine disaster, narrowly missing losing some of it own workers in the explosion.

“We learnt that when we are working in an environment controlled by others we must be aware of anything that could impact on the safety of our people, even though we might be a very small part of the operation. And we need to be much more inquisitive, and much more demanding of understanding the whole safety environment we work in at all times.”

The company also welcomes the new health and safety legislation coming into effect this year, and doesn’t see it having much of an impact on day-to-day work.

“It is really based on health and safety laws in Australia and, through our Australian connections, a lot of it has [already] been transferred here.

“I would like to think most civil construction companies in New Zealand already have practices in place that would comply with the new legislation.

“McConnell Dowell now operates a registered private training establishment providing health and safety training to NZQA certification, the only construction company to do so.”

Tomorrow’s challenges

Roger believes a major constraint to the industry is its cyclic nature of boom and bust.

“This cyclic nature creates uncertainty for construction companies when it comes to investing in people, plant and equipment.

“One hope I have is that there is greater consistency with the forward infrastructure workload. That would provide greater confidence for construction companies to invest.”

He sees an opportunity for the country to plan development work across the country at a “sustainable pace”.

“And to achieve that we need to look cross-sector – not just transport, water or wastewater, but all parts of our infrastructure. I think there are greater opportunities in the future for both local and central government to bundle infrastructure packages.”

Another challenge for the construction industry is interest from overseas companies, says Roger, particularly Australia where there has been a lot of rationalisation in the construction sector with mergers and acquisitions.

“With the downturn in the Australian construction industry (off the back of a downturn in the resources sector) they are looking for opportunities here, particularly with our projected growth in construction over the next 10 years.”

A family culture

While three decades is a long time for any company or industry, Roger says there are things that he is pleased have not changed.

“One of the things I am quite proud of is the fact we are still doing the type of work that we were doing when I first joined the company.

“We are still doing difficult and challenging projects and doing them well, and there’s almost a family culture and value around the way we work together on these projects.

“We apply a lot of discipline and engineering expertise into finding a way of doing things differently while developing a safe, efficient way of doing projects that ‘de-risks’ them.”

For an engineer, that’s one of the things that gets him excited, gets him out of bed early in the morning, and keeps him awake at night, he adds.

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