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IN THIS ISSUE |
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EYE ON AUCKLAND |
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| AuCKLAnD iS nEW ZEALAnD’S BiggEST COnSTruCTiOn MArKET rEPrESEnTing ALMOST A THirD Of TOTAL DEMAnD. THE PrODuCTiviTy PArTnErSHiP’S nATiOnAL COnSTruCTiOn PiPELinE rEPOrT rELEASED in DECEMBEr 2013 POinTS TO A 68% inCrEASE in COnSTruCTiOn ACTiviTy OvEr THE nExT fivE yEArS in THE rEgiOn. WE ASKED A nuMBEr Of inDuSTry figurES fOr THEir viEWS On THiS COnSTruCTiOn HOT SPOT. |
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Barry Potter
General Manager
New Zealand
GHD |
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Graham Darlow
Chief Executive
Fletcher Building
Construction Group |
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Rachel de Lambert
Director of Design
Boffa Miskell |
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Richard May
Director
ArcBlue Consulting, and
Productivity Partnership
Procurement Workstream Leader
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Derrick Adams
Chief Executive
HEB Construction |
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| Where do you see the key opportunities for your field in Auckland over the next few years? |
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BARRY
I believe there are opportunities in three main areas. Firstly, in the property and buildings sector; from commercial buildings and shopping malls to major projects for government clients such as the NZ Defence Force and the Department of Corrections. Secondly, we are seeing a number of exciting opportunities coming up in the transportation sector including the City Rail Link, as well as significant highway projects such as the Pūhoi to Wellsford Road of National Significance. Finally, there is also a nice wave of work coming through that is related to water treatment, water reticulation and stormwater.
GRAHAM
The number one opportunity is responding to the high demand for more houses, particularly affordable homes. That’s followed by the uplift in vertical construction, particularly institutional building. The Newmarket Campus for Auckland University and the International Convention Centre at Sky City are two big projects coming to market soon.
RACHEL
There’s a much greater focus on Auckland’s growth being quality and compact. People are expecting better quality outcomes in terms of the environment they live in. Quality, compact growth includes greater access to quality public spaces, transport networks and amenities, as well as quality buildings.
RICHARD
Getting the wider Auckland Council to take a lead on alternative approaches to procurement, including longer term thinking and managing key relationships.The Council’s procurement strategy, which includes social procurement, is an excellent framework to help drive change. instead of doing things project by project there’s a lot to be gained from moving to a programme or portfolio oriented approach for the construction industry as a whole. Also, more collaborative contracting models.
DERRICK
There are ongoing opportunities for work with the providers of Auckland’s underlying infrastructure including Auckland Transport, Auckland Council, Watercare and the NZ Transport Agency. The big change for the civil construction sector is the private subdivision market, which is becoming quite buoyant.
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| What are the barriers to productivity? |
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BARRY
The most notable barrier is the lengthy time it takes for projects to come on line, which is often linked to funding or planning issues. Managing workload resources can also be a challenge – having the right people and resources available to plan and design projects. We overcome this challenge through our global network called ‘One GHD’, which allows us to draw best-for-project resources from any GHD office in the world.
GRAHAM
For us in house construction the lack of availability of land at the right price is a real constraint. As a result, we’re having to invest in much bigger and longer timeframes. Fletcher is buying the Manukau Golf Course and part of the Peninsula Golf Course and trying hard to develop the Three Kings Quarry into a housing development. The other thing is the high amount of labour in everything we build. So we’re standardising and modularising common features in our buildings as much as possible.
RACHEL
The key issue at the design and consenting end is the length of the planning and approvals processes. More streamlined processes are being trialled with the Special Housing Areas and there’s an aspiration for these to become business as usual.
RICHARD
Lack of standardisation and continued project by project thinking. In the commercial sector public sector entities could develop common, consistent approaches to procurement. In the residential sector client preference for bespoke housing slows down build times – we could look at bespoke through a standardisation lens using more standardised components while retaining a degree of individuality. This would facilitate prefabrication off-site and tighter tolerances that would speed up house building and reduce the number of site visits to measure and fix.
DERRICK
Everyone is more productive when work is well planned and sequenced, rather than a knee jerk response. Greater certainty of upcoming workload is hugely helpful. Also helpful are procurement models which provide for early involvement of all parties in a project and allow their input at the design stage. That goes hand in hand with a resource consenting process that doesn’t constrain the ability to add value at a later stage so, when a contractor comes up with a good idea that cuts costs, it can be accommodated.
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| How do we maintain quality while meeting demand and keeping to budget? |
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BARRY
Innovative procurement models like PPPs and design and construct models really do encourage smart solutions. We’re seeing the NZ Transport Agency using Public Private Partnerships (PPPs) to good effect. Early contractor involvement also assists good outcomes. We need to encourage greater collaboration between all parties on a project – from clients, designers and consultants to constructors and end users. It works best to run a project as a team focused on common outcomes with incentives in place to drive that.
GRAHAM
A lot is down to the planning and design and preconstruction activity. Engagement of contractors early in a project allows them to gear up and maximise opportunities. If you dump projects on the market late it’s harder to resource for a higher workload. ECI or early contractor involvement has been around for over a decade in the civil construction sector but the vertical construction sector has been slow to pick it up. Some people believe by going out to tender they’ll get a good response from the market but ECI enables contractors to drive value and scale up to meet quality and productivity demands. It’s also good for owners because it gives them access to the best contractors in a high demand, low supply market.
RACHEL
The budget issue is the difficult one because affordability is a multi-faceted matter. There needs to be joined up thinking about the cost implications of policies which specify increasingly high standards for infrastructure and construction components. For example, in Auckland the new standard minimum width of footpaths in residential areas is 1.8 metres. That width is driven by a desire to enable two wheel chairs or mobility scooters to pass. Realistically, how often does that happen and, if so, isn’t there plenty of opportunity for one to yield to another in a driveway or such? In development these sort of over the top minimum standards add considerably to the overall direct cost, as well as to land “lost” to development. Inevitably, the cost is passed on to new home owners. We need to strike a sensible balance between standards and affordability and continually ask “what value does this add to the community?”
RICHARD
We need better understanding of cost drivers and alternatives for commodities. Greater standardisation would streamline the construction process. For instance, in Canada there are two front door sizes. Standardisation means you can trust measurements and build houses faster. A merchant recently told me that a popular paint supplier has 350 colours in their range but just five colours account for 99% of their sales. It makes sense to pay less for standard products sold in large volumes and pay a premium for choice. Builders need to become smarter on supply chains and avoid being locked into specific suppliers. Greater use of BIM, especially the ability to assess whole of life cost, has untapped potential.
DERRICK
A lot of quality issues relate to people. If you’ve got the A team you get a good quality result. To develop A teams, the industry needs to invest in skills training. To commit to that investment you need certainty of workload.
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| Here are some of the major construction projects currently underway or in the pipeline for Auckland. |
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Waterview |
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Auckland Manukau Eastern Transport Initiative |
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City Rail Link |
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University of Auckland Science Campus Renewal |
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University of Auckland Newmarket Campus |
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Watercare Central Interceptor |
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East West Link |
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Puhoi to Warkworth SH1 Extension (RON) |
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New Zealand International Convention Centre |
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| FEATURE |
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VALUE BUILDER - WAYNE DONNELY
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| WAynE DOnnELLy iS CHiEf OPErATing OffiCEr AnD A DirECTOr Of MCCOnnELL DOWELL COnSTruCTOrS LTD, PArT Of THE MCCOnnELL DOWELL grOuP AnD OnE Of THE LArgEST COnSTruCTOrS Of nEW infrASTruCTurE in AuSTrALASiA AnD THE MiDDLE EAST. THE COMPAny gEnErATES $3 BiLLiOn Of nEW BuiLD EvEry yEAr AnD iS A MAJOr PArTnEr in THE WELL-COnnECTED ALLiAnCE BuiLDing AuCKLAnD’S WATErviEW PrOJECT. WAynE iS A CiviL EnginEEr WiTH A LOng ASSOCiATiOn WiTH infrASTruCTurE DEvELOPMEnT. SinCE BEing gEnErAL MAnAgEr fOr grEEn MCCAHiLL COnSTruCTiOn LTD in THE 1980S, HE HAS BEEn DirECTOr Of PLAnning fOr AuCKLAnD CiTy, CEO Of LAnD TrAnSPOrT nEW ZEALAnD AnD gEnErAL MAnAgEr Of rOAD AnD rAiL POLiCy fOr THE MiniSTry Of TrAnSPOrT. |
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| Wayne shares his observations of how we can improve construction productivity in Auckland, and elsewhere. |
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Opportunities for innovation to create value and to improve productivity all lie at the periphery of what each of us do, but they need to be at the core of what we do collectively if we are to realise the potential of big infrastructure planning like Auckland Council’s vision of becoming the world’s most liveable city. It’s a simple observation of a complex situation. And it begs the question, what needs to change for us to more easily achieve that vision?”
We can get closer to achieving that vision if those who build and those who plan work more closely together, more often. This type of collaboration creates a climate of trust and confidence that sparks innovation and encourages people to achieve far greater productivity.
The selection process determines the potential for innovation. Greater value and increased productivity could come from a more mature approach to tenders, where owners choose constructors based on likely value creation, rather than price.
It would be a real sign of maturity in the construction sector if innovation potential and value creation were discussed more often by owners and the last things they had to worry about were quality and efficient cost – both of which should be realistic expectations. Again, a simple observation of a complex situation. Price and quality can be benchmarked. Innovation and value creation come from teamwork, collaboration and openness – making the peripheral central.
The Productivity Partnership has been going for four years now and is creating the know-how and resources that lay the foundation for the capability and maturity I am talking about.
Working safely is another key driver of value creation and productivity. Owners can influence change and achieve improvements in this area faster than legislation by setting clear safety benchmarking that applies to everyone. It should have equal or greater value in tender submissions as price. Owners are under-estimating their impact for good here.
A third and real driver of value is a focus on the end customer. Owners and constructors are only the agents and suppliers.
Timing is key. Arriving at a tipping point where a sufficient number of industry organisations reach the same understanding at the same time and become willing to take an integrated, collaborative approach to construction across the supply chain. Great examples of this are the Waterview Well-Connected Alliance in Auckland and the SCIRT Alliance rebuilding Christchurch. This type of cohesive collaboration creates real lasting value and a better customer experience.
When the true potential of the Productivity Partnership is realised, we can look forward to achieving optimal value for Aucklanders from important infrastructure initiatives like those envisaged in the Auckland Plan.
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 IN PARTNERSHIP
ExCiTing THingS ArE HAPPEning in AuCKLAnD’S BuiLDing AnD COnSTruCTiOn SECTOr.
The pressure to deliver affordable housing and the forecast unprecedented increase in construction activity over the next five years is precipitating innovative thinking and new ways of behaving. “Needs must”, as the saying goes.
The logic behind the Special Housing Areas is clear to see. The easier it is to contract and deliver a project, the more productive you’re going to be.
Most noticeable is increased sector collaboration. The Auckland Procurement and Infrastructure Forum, established as the Auckland Procurement Forum by the Partnership in 2011, is playing an increasingly important role in bringing the demand and the supply sides of the industry together. It makes sense for clients, contractors and consultants to talk to each other and share information – if only to assist better procurement and management of resources.
When the Partnership initially set out to get the construction clients of a region in the same room, Auckland was the obvious place to start because of the sustained level of activity in that market and an existing network to start with, via the Construction Clients Group. The Forum has evolved quickly in less than three years. Each Chair has added value. Former Auckland Council COO Patricia Reade facilitated its first meeting. Her successor acting in that role, Ian Maxwell, brought the Forum and Council’s work closer together. Current COO and Forum Chair Dean Kimpton has cemented this alliance to help integration of the construction process from strategy to delivery, and brought contractors into the room. With its expanded mandate, the Auckland Infrastructure and Procurement Forum has more power to do good.
The Forum is more than a talk fest. It provides the input to the Auckland Pipeline Report, a valued industry tool and the first of its kind in the country. This report spurred the development of the Partnership’s National Pipeline Report with its broader view of future construction workload and we are now trying to align these reports in terms of release and how data is collected and analysed. It’s pleasing to see the projects that the Forum’s Procurement Working Group plans to get its teeth into. Led by Auckland Council’s Chief Engineer Sarah Sinclair, it promises to make a real difference to local procurement practice.
The Partnership's role in Auckland is a connector – bringing together industry with the Council and central government to ensure a productive, integrated approach to construction. We are appreciative of the time and wisdom freely given to the sector through the Forum. I am confident it will continue as a force for positive change.
Chris Kane
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ON SITE |
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Currently, the Productivity Partnership is working with industry on: |
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Commissioning NZIER research on SME innovation. |
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Producing a skills landscape report to identify what construction skills training is currently being provided by MBIE, ITOs and the industry, in response to record demand for skilled workers. |
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Mapping future skills requirements with a forward view to 2020. |
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Developing BIM acceleration initiatives including a New Zealand BIM Handbook and BIM Schedule. |
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Developing the Partnership's Business Plan for the new financial year. |
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| FEATURE |
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AUCKLAnD FORUm’s nAmE ExPAnDs WITh mAnDATE |
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AuCKLAnD COunCiL’S MAyOrAL infrASTruCTurE PrOviDErS fOruM iS JOining fOrCES WiTH THE PrODuCTiviTy PArTnErSHiP’S AuCKLAnD PrOCurEMEnT fOruM TO BECOME THE AuCKLAnD infrASTruCTurE AnD PrOCurEMEnT fOruM.
The new name reflects the expansion of its membership to include the supply side of the industry and an expanded mandate.
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| The Auckland Infrastructure and Procurement Forum aims to connect strategy with procurement and delivery of civil and social infrastructure for Auckland, in a manner consistent with the Auckland Plan and affordable for the people of Auckland. |
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The Forum brings together infrastructure providers, advisors, contractors, designers and suppliers to help ensure that investment in Auckland’s infrastructure better supports the region’s growth. It provides for improved procurement and co-ordination of major construction projects by making sure that the key players discuss their plans. The forum is chaired by Auckland Council Chief Operating Officer Dean Kimpton. It has a small number of sub-forum groups, including one for infrastructure providers focused on strategy and long-term planning. This will continue to be led by Dr Roger Blakeley. Other sub-groups are being established to reflect the Forum’s broadened focus and greater expectations for delivery.
"The Auckland Infrastructure and Procurement Forum brings together decision makers, owners/investors and delivery agents in one place with a common purpose," says Dean. “This enables us to take a collective, long-term view of Auckland’s development so we know what we’re building, when, where and why. The why is the strategy. An integrated approach will help ensure delivery on the Auckland Plan.”
“Essentially, the Forum is about sharing information and lifting productivity within the sector,” he says. “The way the Productivity Partnership collects data around capital projects protects client confidentiality and gives people confidence that the information will not be used to give away any competitive advantage.”
Productivity Partnership Manager Chris Kane is enthusiastic about the benefits of the expanded Forum. “It gives greater transparency to where we’re going in terms of infrastructure strategy,” says Chris. “Everyone involved in providing Auckland’s infrastructure can see the pipeline of projects to deliver that and how we can better procure those projects.”
He says the Auckland Infrastructure and Procurement Forum contributes to the Partnership’s overall goal of improving the productivity of New Zealand’s building and construction sector.
“Regularly having the right people in the room at the same time is a productivity gain in itself!”
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Auckland Infrastructure and Procurement Forum Steering Group |
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From left to right: Richard May – ArcBlue Consulting/Productivity Partnership; Colin Field – Parks Sports & Recreation, Auckland Council; Dean Kimpton – Chief Operating Officer, Auckland Council (Chair); Tim Warren – Constructing Excellence; Louise Ward – Waitemata District Health Board; Sarah Sinclair – Chief Engineer, Auckland Council; Mark Colborn – Ministry of Education; Tim Munro – Watercare; Dirk De Jong – Vector; Tom Newson – NZTA (standing down); Heather Stonyer – AUT; Phil Davidson – NZTA; and Alan Wallace – Auckland Transport.
Absent: Kevin Doherty – NZTA PPP; Will Smith – Unitec; Graham Stanage – RCP; Tony McCartney – Auckland Transport; Heather Stonyer – AUT; Roger Butcher – Westpac; James Adams – Telecom NZ; Dino Matsis – University of Auckland Council; Louis Ward – Waitemata District Health Board; Brian Dackers – RLB; Chris Kane – Productivity Partnership/MBIE; Blair Cardno – Statistics NZ; and David Nummy – Unitec .
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DID YOU KNOW? |
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Since 2013, 63 special housing Areas (SHAs)
have been created in Auckland to fast track the
construction of more affordable homes. |
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| ARTICLE |
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SPECIAL TREATMENT
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SPECiAL HOuSing ArEAS (SHAS) HAvE BEEn CrEATED TO DELivEr MOrE AffOrDABLE HOMES fOr AuCKLAnD. fOLLOWing THE Signing Of THE AuCKLAnD HOuSing ACCOrD BETWEEn AuCKLAnD COunCiL AnD CEnTrAL gOvErnMEnT in 2013, 63 ArEAS Of LAnD – BOTH WiTHin THE ExiSTing urBAn ArEA AnD OuTLying “grEEn fiELD” ArEAS – HAvE BEEn iDEnTifiED By AuCKLAnD COunCiL AS SHAS TO MEET grOWing DEMAnD fOr HOuSing.
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In SHAs land owners and developers can have development approvals fast-tracked through a streamlined consenting process and benefit from new zoning proposals in the Proposed Auckland Unitary Plan.
Managing SHAs comes under the council’s new Housing Project Office (HPO). The HPO was set up in October last year in response to Auckland’s many housing challenges. It provides fully integrated end-to-end services, from policy to master planning to consenting, so customers no longer have to run around several council departments.
“It’s a one stop council shop bringing together staff from across all areas of our business relating to infrastructure,” says Ree Anderson, the HPO’s Project Director, Housing. “We work collaboratively with the development sector to support housing delivery in Auckland, including good developments and timely processing of consents.”
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Left to right: Auckland
Council Traffic Advisor,
Special Housing Area
Consenting, Rob Douglas- Jones; Project Director
Housing, Ree Anderson; and Manager Growth &
Infrastructure Strategy,
Housing, David Clelland. |
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A prerequisite for SHAs is infrastructure readiness and that means having key infrastructure including water, wastewater, stormwater and transport infrastructure available or made available. The HPO works with colleagues in the council-controlled organisations Auckland Transport and Watercare Services, as well as the council’s own stormwater, parks and libraries units, to this end. The team also regularly meets with colleagues at the Ministry of Education and the Ministry of Business, Innovation and Employment.
“You need serviced land for development,” says Ree. “Social infrastructure is important too. We’re working with central government to ensure we have the schools, community centres, libraries and parks required to create good neighbourhoods.
“Now that we’re one council, it’s easier to co-ordinate investment in, and delivery of, critical infrastructure to support the Auckland Plan and Unitary Plan,” she says. “Well managed development also helps pay for that infrastructure. SHAs help us prioritise investment decisions – where and when development occurs, in line with the Auckland Plan. SHAs allow for the early uptake of development capacity. They are key to producing housing more quickly and increasing construction sector productivity. Just how you provide affordable housing – for example, community housing, volume building and innovative construction techniques – is an area we are continuing to explore.”
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| ARTICLE |
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4Th AUCKLAnD
PIPELInE REPORT
RELEAsED
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Auckland Pipeline Report No. 4 has been published by the Auckland Infrastructure and Procurement Forum. The Report revises and updates the construction workload projection data provided in the third Auckland Pipeline Report released in October 2013. This Report is a precursor to the issuing of the further expanded and more detailed Report No.5 in July this year. Report No.4 covers forward capital expenditure on new builds, refurbishment and upgrades by major public sector clients and some private sector clients. Several new organisations have provided data.
For the first time funding is split into committed expenditure (under contract or out to tender) and proposed expenditure (planned). A supply side perspective has also been added.
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| PARTNERSHIP PEOPLE |
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PhILLIPPA WARD |
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| EFFECTIVE FASHIONISTA |
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Immaculately groomed and ever efficient, Phillippa Ward has joined the Productivity Partnership team as Secretariat Administrator. It’s Phillippa with two “Ls” or Pip, as she’s happy to be called.
Pip’s been working in the building and construction group for three years, first at the Department of Building and Housing and then at MBIE in the Deputy Chief Executive’s Office. Part of her role involved time in the Beehive, supporting the Minister for Building and Construction. Previously, she’s held positions in the Tertiary Education Commission, the New Zealand Fire Service and Ministry of Foreign Affairs and Trade.
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Creative by nature, she did a degree in fashion design and technology, so don’t be surprised if you get a tailor-made response to your queries! The association between fashion, interior design and architecture appeals to her. “It’s not a big step from there into the building and construction sector,” says Pip. She’s carried forward her passion for fashion with sewing to a professional standard and following European haute couture. And she’s an avid reader of design magazines and a big fan of the Grand Designs programme on TV. Travel is another love and Paris is her pick of places. ”I just love the buildings and french culture,” she says.
Pip’s pleased to be in the Partnership and surrounded by people with similar interests. "I like to work with people in the industry." She’s the first person to contact on Partnership matters – call 901 9883 or email – and don’t forget to close with “toodle Pip”!
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