Nelson City Council voted unanimously on Thursday 17 February to create a dedicated COVID-19 fund to ensure planned
capital projects can be delivered over the next few years, in response to increased prices from ever-changing and
unpredictable global supply issues caused by COVID-19.
Interruptions to supply chains and scarcity of materials have left organisations and businesses throughout the world
facing rapidly increasing costs. This inevitably places pressure on budgets, which were set prior to the disruption
being felt, despite including industry-standard allowances for contingencies.
To ensure tenders for planned projects can be awarded, started on time, and completed successfully, Council will create
a COVID-19 fund worth $2.8m, that will be used to cover any increased costs as a result of the pandemic. This decision
comes alongside a decision to grant the Tenders Subcommittee the ability to approve the award of tenders, saving
potentially 10 weeks compared to normal approval processes.
Group Manager Infrastructure Alec Louverdis says creating the fund will ensure funding is easily accessible at short
notice when needed, but it is designed to only be drawn on when absolutely necessary.
“This streamlined process will ultimately save money for ratepayers in the longer term as materials can be secured
quickly and will allow contractors to plan their work programmes with greater certainty.
“Council’s projects will continue to face a lot of strain due to the economic situation created by COVID-19. To secure
the best possible prices for Nelson, and ensure we can complete planned projects, it’s vital we have this money on hand
so we can act fast when required.”
Nelson Mayor Rachel Reese says COVID-19 is causing disruption to the supply chain and price stability for the businesses
that undertake Council’s work.
"It’s important that we adjust our processes to achieve the best prices possible while we continue with infrastructure
investment in the city.
"These changes will provide a framework for timely decision-making while maintaining budgetary discipline. They are a
temporary change and will be reviewed regularly throughout the remainder of the year.”
Civil Contractors New Zealand (CCNZ) Nelson Marlborough Chairman Brendon Dodd says:
“In addition to the current streamlined procurement and early contractor involvement process used successfully by Nelson
City Council in close collaboration and partnership with the Nelson Marlborough CCNZ, we wish to state our support for
the continued innovation by Council in thinking of ways to deal with the challenges COVID-19 is posing the industry.
“Further streamlining of Council’s internal contract award processes will ensure greater certainty for all contractors
and will further allow all contractors to manage pricing, workloads and programming – delivering better outcomes for all
during these very tough times for the industry.”
The COVID-19 fund will be reassessed by Council in 12 months’ time, giving elected members the chance to evaluate the
success of the fund and whether it should continue or stop.