Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


EQC defends Fletcher Building's role in Canterbury repairs

Fletcher not abusing its role running Canterbury home repairs, EQC says

By Paul McBeth

Dec. 5 (BusinessDesk) - Fletcher Building, the country's biggest listed company, isn't abusing its position as the Earthquake Commission's go-to guy for home repairs in Canterbury, and is providing "satisfactory value for money."

EQC chairman Michael Wintringham told Parliament's finance and expenditure committee that Fletcher's role managing the repair programme has met the government-backed natural disaster insurer's criteria around cost, quality, timeliness and safety.

"On the basis of that assessment I have no reason to doubt that we are getting satisfactory value for money," Wintringham said. "The transaction and administration cost of running two PMOs (project management offices), as well as the fact that both would be seeking labour from the same labour pool meant that the advantages would probably be marginal."

Fletcher manages EQC's repair programme for homes with damage of between $15,000 and $100,000. Earlier this year Fletcher was forced to defend its track record in Christchurch against labour union claims it was profiteering by cutting pay rates for painters and plasterers.

The construction company's dominant position in the country's building sector is set to come under government officials' gaze as part of plans to investigate the industry's cost structure. The study is part of a wider response to getting a handle on the affordability of New Zealand homes.

EQC chief executive Ian Simpson said the cost of repair jobs may come under pressure when private insurers come to the market next year, and start competing for the same labour pool of 70,000 tradespeople and driving up wages.

"Having two PMOs would fight over that same resource, and in our view would increase the costs rather than decrease," Simpson said. "When the private insurance sector does kick off, and it will be early 2013, that's our next big risk."

The final repair cost for some 26,000 homes fixed so far has been about 15 percent above initial assessments, mainly due to the later quakes, he said.

"There's only 1 percent difference between EQC's assessed cost of value and the actual final repair cost that's given by the contractor," Simpson said.

Fletcher shares fell 0.9 percent to $7.84, and have rallied 30 percent this year. The stock is rated an average 'outperform' based on 11 analyst recommendations compiled by Reuters, with a median target price of $8.275.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news