February Construction News

MinterEllisonRuddWatts in the Market

Panel confirmed for thought leadership session on Procurement and Risk Allocation

The first event in our Thought Leadership programme scheduled for 4 April 2019 has a panel of industry representatives discussing trends, developments and upcoming changes in procurement and risk allocation. Our panel members will specifically look at:

  • Government initiatives on procurement and risk allocation
  • Shifting the lowest bid mentality
  • Increasing the focus on better risk allocation

Our panel consists of Travis Tomlinson, Stephen Gracey, John Ivil and Anna Butler.

See an outline of the entire year’s programme here.

Real Estate partners present at Retirement Village seminar

At our Retirement Village Seminar Partners Andrew Monteith, Bianca Tree and Janine Stewart discussed Acquisition and development for the year ahead.

Key points from the seminar include:

  • Residential land is now “sensitive land” requiring consent under the Overseas Investment Act 2005, which will impact retirement developments;
  • The amended Act provides a new specific OIO consent pathway for new retirement developments or developments which increase the number of dwellings on a site;
  • The Auckland Unitary Plan has provided for more intensive development, however it is still placing constraints on the form of development that retirement village operators are wanting to achieve;
  • The National Planning Standards and the Urban Development Authority may provide opportunity to maximise development potential;
  • A dispute forum is an inefficient place for parties to construction contracts to deal with risk allocation; risk allocation should be dealt with at an early stage of a project;
  • Risks for contracts all differ and require the negotiation of some bespoke terms and conditions, so it is important for parties to consider the form of a contract; and
  • It is not enough for a principal to rely on “clever contracting” or a contractor on variations and extensions of time to combat risks. Risks should be priced before the project begins.

Sarah Sinclair Appointed to Panel Supporting Treasury

Construction and Infrastructure Partner and Chair, Sarah Sinclair, has been appointed to the panel of experts supporting Treasury to establish the New Zealand Infrastructure Commission. Reported by the National Business Review here.

The Rub on Retentions

Senior Associate, Riaia Donald and Solicitor, Frank Brown have published an article, “The Rub on Retentions”, in the Quarrying and Mining Magazine (published with the Contractor Magazine) on best measures for contractors in light of the recent Bennet v Ebert Construction Limited (In receivership & liquidation) decision. Read it online here.

Legal news

Mainzeal directors found personally liable for reckless trading

The Mainzeal decision of 26 February 2019 is a significant decision for New Zealand directors.  MinterEllisonRuddWatts’ Dispute and Insolvency teams acted for the liquidators BDO in New Zealand.  The High Court found the Mainzeal former directors personally liable for $36m.  The decision will have resounding implications for the construction industry with directors of construction companies facing the real prospect of shouldering personal financial liability in the event of a collapse.

Click here to read our alert.

New guidance for fire performance

Working alongside Auckland Council and BRANZ, MBIE has developed guidance on how external cladding systems should be tested for fire spread performance. The guidance is a temporary solution to be used until the appropriate changes are incorporated into the Acceptable Solutions and Verification Methods. Read the new guidance on Fire performance of external wall cladding systems here.

Market activity

$5.1 billion in council infrastructure at risk from 1 metre sea level rise

A new Local Government New Zealand report that mapped out various sea level rise scenarios has found $5.1b worth of council assets at risk from a 1 metre rise and $14.1b at 3m. These figures are exclusive of the assets that sit atop the infrastructure like homes, schools and businesses. Present projections suggest that New Zealand can expect sea level rises of 30-100cm this century.

Full article here

Work is going ahead at $50m Christchurch rest home rebuild

Oceania Healthcare has started building its new 139 room rest home in Papanui, Christchurch. Oceania was originally refused consent, but appealed to the Environment Court and gained approval following mediation with neighbouring residents. The home replaces the Windermere Retirement Village, which was demolished after suffering damage in the 2010 and 2011 earthquakes while it was halfway through a two-stage development. Oceania currently has almost 600 units, spread over several projects, under construction across the country.

Full article here

Common plywood advertised as having the highest fire safety rating found to be flammable

A sample of Firesafe Radiata Plywood manufactured by Decortech has returned a safety rating of Group 3, which indicates significantly lower fire retardant qualities than previously advertised. Building Research Association of New Zealand performed the test without knowing it was Firesafe Radiata Plywood after previously giving it the highest rating in 2013. Decortech have launched an internal investigation and no longer sell the product.

Full article here

Transport contractors nervous as project pipeline narrows

The roading industry fears a downturn and layoffs as large projects inherited from the previous government finish up. $4.8bn worth of major road projects are expected to finish in the next two years but only $1.1bn worth would be starting. Transport Minister Phil Twyford acknowledged that priorities had changed, including towards rail. More investment would be made in a larger number of smaller projects rather than a smaller number of large projects.

Full article here

SkyCity convention centre opening delayed till second-half of 2020

The $700 million-plus international convention centre will not open until the second-half of next year, SkyCity Entertainment Group has announced. This delay is despite many conferences hosting around 8,000 people being booked in the first two quarters of 2020.  SkyCity has also revealed that it has collected $39.5m in liquidated damages from Fletcher for the convention centre project as well as the Horizon Hotel which is being built alongside the centre.

Full article here

Public gets first taste of $167m Christchurch Town Hall restoration

The public experienced the stunning restoration of the Town Hall during Saturday’s opening where hundreds queued for their first chance to see the revamped town hall in what is described as the heart and soul of the city. This was one of the most significant events in the city’s recovery. The cost of the restoration came to $167 million, which is almost one-third over its original budget of $127.5 million, and only $68 million is covered by insurance.

Full article here

Proposed eight-storey hotel declined due to its affect on ‘pleasantness' of Taupō

Following a hearing in December, involving 72 public submissions with 19 in support and 49 in opposition. Resource consent commissioners have denied the proposed building of a 28.8m eight-storey hotel, featuring ground level retail, a roof-top restaurant, a bar and spa pool, and three levels of basement car parking, on an empty Tuwharetoa St site.

In a recently submitted report, they based their reasoning on the significant height of the hotel relative to the permitted development height limit for the area, that the hotel doesn’t fit the character of the town and would affect the “pleasantness” of Taupō.

Full article here

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