Warnings over Chch rebuild

Delayed peak in activity causing discomfort for some construction companies.

Construction companies waiting for the Christchurch rebuild to get fully under way are becoming frustrated at the lack of progress in the central-city rebuild, according to reports.

The rebuild was initially expected to peak in 2015-16, but it now looks more likely to be in 2016-17. The delay means builders are facing increased competition, rising costs and cash flow constraints, with the length of time taken for retentions to be paid adding to the pressure.

Project management firm Project 1 Design director Marc Findlay said that firms need to understand how and when they will be paid, with the lack ofclarity leading some out-of-town contractors to leave Christchurch.

” The delay means builders are facing increased competition, rising costs and cash flow constraints, with the length of time taken for retentions to be paid adding to the pressure

“I know a couple of instances where they think ‘this is too hard, we’re just walking away, regardless of being paid or not’,” he said.

Insolvency expert McDonald Vague has warned of the “huge overheads” some companies are having to absorb, while they wait for the profitable work to start: “the flow-on effect is that construction firms may have to accept a lower margin for another 12 months to keep their employees busy”.

Smith Crane & Construction managing director Tim Smith said he wouldn’t take on many extra staff until the rebuild gathers steam.

“Larger construction companies have ramped up staff and overheads quite significantly on the proviso that there was going to be a lot more work, and I don’t think the work is there that they thought was going to be,” he said.