NZ construction industry needs overseas help to deliver

New Zealand’s construction sector will need international help to deliver the magnitude of infrastructure work that could flow through as a result of the Government’s plan to bring forward significant spending on infrastructure projects over coming years, says Frank Xu, President of the non-profit NZ Chinese Building Industry Association.

Xu says that although details are not yet fully clear after the Government’s announcement yesterday on the spending package, latest industry reports forecast what he describes as a ‘whopping’ amount of spend by NZ standards.

“Infometrics’ latest Infrastructure Pipeline Profile forecast shows that $138 billion of infrastructure spending is planned across New Zealand. When you add this to the government’s announcement and the total building construction value in the National Construction Pipeline Report - of circa $35-40 billion per annum for the next 10 years - you have a whopping amount that we will not have the capacity to deliver with resources from within New Zealand alone.”

Speaking at the China Council for the Promotion of International Trade event in Auckland on Chinese investment in New Zealand, Xu said that history has shown that we don’t have the capacity to keep up with such demand in New Zealand by ourselves, which has contributed to the housing crisis.

“Overseas partnerships can be a constructive way to help us address our challenge. For example, after more than 30 years of heavy investment and development in its own infrastructure and construction projects, China has all the things we need - not only funding but also the experience, skills, people and technology.

“The two economies are highly complementary, particularly since the recent signing of the FTA trade upgrade. If the original 2008 FTA helped the NZ economy to lift out of the GFC quickly and strongly - with two-way trade from $8.2 billion in the year ended June 2007 to recently exceeding NZ$32 billion now, I argue that this latest FTA upgrade will help us to meet our infrastructure and housing challenge.”

Xu adds that the dairy industry can show a constructive and productive way forward. “The dairy sector is a great example for the infrastructure sector to follow. Comprehensive bilateral engagement between our two countries on dairy is driving bilateral investment - from NZ into China and China into NZ - and trade in our strongest merchandise sector. It is also leading to scientific exchange among public and private sectors inside and outside of the bilateral arrangements: government-to-government agreements, student exchanges, and representation at food safety and quality events in both countries.

“So, if cooperation can do this for the dairy industry, why not also for our infrastructure and building industry?”

Xu adds that NZCBIA and its members are already encouraging increased NZ-Chinese cooperation and working together, as shown by:

• NZCBIA and China Construction Bank NZ Ltd (CCBNZ) proactively promoting state-of-the-art Chinese-made construction machinery to NZ infrastructure projects, with CCBNZ able to offer loans to enable purchases;

• NZCBIA has been facilitating trade apprentice training through UNITEC and Sichuan College of Architecture & Technology (SCAT - http://www.scatc.net). SCAT has many excellent training facilities which reflecting the real construction environment such as curtain wall installation, brick/block laying, lift & escalator installation. Such facilities can help NZ to fast-track trade apprentice training;

• NZCBIA member Changda International has been in partnership with local consulting company CADENZA to introduce Chinese volumetric prefab products to several Auckland projects. Auckland Council visited the Chinese prefab manufacturer CIMC as part of the QA process to ensure the prefab products comply with NZ Building Code. (http://www.cimc.com/en/index.php?m=content&c=index&a=show&catid=37&id=10)

Says Xu: “Things are happening at a project and business level. It is now time for central and local governments to act in the best interest of New Zealand by obtaining the much-needed funding, skills, labour and technology to meet this significant challenge.”

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