Roading Contractors Grow to Meet Funding Demands

30 June 2005

Roading Contractors Grow to Meet Funding Demands

Land Transport New Zealand's announcement of $1.7 billion funding for the roading sector in 2005/06 combined with other recent Government announcements and Transit New Zealand's 10 year construction programme will see current road construction funding double in the short-term.

"Roading contractors have been gearing up to deliver this additional work", said Chris Olsen, CEO of the Roading Industry Association Roading NZ. "The workforce has grown by fifty percent over the last five years and in the last year the industry has taken on around 1,000 new employees. These numbers will continue to grow as long as there is certainty in future work loads" he said.

"Unfortunately, although we are now seeing some work programmes brought forward, thereafter there is substantial uncertainty as to future work loads, which is an obvious risk to the industry" said Mr Olsen.

Responding to those who believe that it is inevitable overseas contractors were going to be part of the scene because of the substantial increases in the programme", Mr Olsen pointed out that contractors from overseas are dealing with skills shortages in their own domestic markets, so they don't bring any additional resources to the New Zealand market - they simply dilute the local resource base".

"One of the key constraints in New Zealand is actually the inefficiency of current Transit and Local Government procurement processes" said Mr Olsen.

"These need to be quick and flexible enough to ensure that roading contractors can be as efficient as possible. This may mean changing both the procurement process itself and the technical specifications utilised to allow roading contractors to bring in best practice technologies such as deep-lift asphalt, which allows for much quicker construction times, reduces delays for motorists during construction and reduces the costs and delays associated with ongoing maintenance."

Roading New Zealand has had an initial discussion with Transit regarding this idea and plans to go back to the agency with a proposal for how this could work for the country.

ENDS

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