April Construction News
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New Zealand Institute of Building webinar – COVID-19 and contract issues
On 8 April 2020, construction partners Janine Stewart and Stephen Price were invited by the New Zealand Institute of Building to discuss key issues in the construction industry arising from COVID-19 and Alert Level 4. They discussed the need for parties to take a balanced approach to their response, between interpreting the express terms of a contract against the need for parties to maintain cash-flow, accommodate for changes in the law and mitigate the effects of COVID-19 to the extent possible.
Construction debate – implications of non-essential construction site closure
On 9 April 2020, our construction partner Janine Stewart debated the implications of non-essential construction site closure resulting from the Alert Level 4 lockdown with Wynn Williams' construction partner, Rebecca Saunders. The debate was facilitated by industry expert Peter Neven. Access the full debate here.
New Zealand Institute of Building webinar – COVID-19 review and remobilisation
On 24 April 2020, construction partners Janine Stewart and Stephen Price joined the New Zealand Institute of Building to present an interactive webinar on “COVID-19 – Review and Remobilisation”. The session clarified questions around suspension, remobilisation and compliance as the construction industry returns to work at Alert Level 3.
During the Alert Level 4 lockdown period, our team and the firm hosted various webinars for our construction and infrastructure clients. These informative sessions addressed the impact of Alert Level 4 on the construction and infrastructure sectors and discussed post-COVID-19 recovery. Below are brief summaries of some of our key webinars:
- “Bridging the Gap: supporting the construction sector in recovering from Level 4 lockdown” (9 April 2020): Construction partner, Janine Stewart, employment partner, Gillian Service, and industry expert, Simon Barnes, discussed the steps construction organisations should consider taking in order to keep their workforce in play to remobilise current projects and strengthen future pipelines. Gillian addressed how companies can protect and support their workface during Alert Level 4 (and going forward) and outlined some health and safety considerations for construction sites once projects are remobilised. Access the full webinar here.
- “Getting the supply chain moving: supporting the construction sector for a resilient recovery” (16 April 2020): Panellists Sarah Sinclair (construction partner), Peter Reidy (CEO of Fletcher Construction) and Dean Kimpton (Former CEO of Auckland Council) discussed the contractual frameworks, mechanics and levers that need to be explored to allow construction and infrastructure projects to re-start as the industry comes out of Level 4 lockdown. Particular emphasis was placed on the arrangements that can be put in place to represent a fair risk allocation and transparent and collaborative processes to allow projects to keep going or get underway and the levers to regain movement in supply chains and project delivery. Access the full webinar here.
- “Directors` duties and insolvency: the impact of COVID-19 for development and construction companies” (22 April 2020): Partners Travis Tomlinson (construction), Silvana Schenone (corporate) and Michael Langdon (banking) discussed the outlook on the construction and infrastructure sectors post-COVID-19 and the measures that the Government intends to put in place to provide relief for directors who are facing challenging decisions in order to keep their companies afloat. This includes providing company directors with a ‘safe harbour’ from their obligations under the Companies Act 1993 and the intended legislation for a ‘business debt hibernation regime’. Access the full webinar here or read a summary of the webinar here.
COVID-19 Thought Leadership
The construction team and the wider firm have published several articles addressing the impact of COVID-19 and Alert Level 4 in relation to contractual relief and entitlements, duties of directors, insolvency and employment, as well as steps construction organisations can take to remobilise their businesses in Alert Level 3. While these articles were written during Alert Level 4, a lot of their content remains applicable in Alert Level 3 and they contain useful recommendations for construction organisations going forward:
Construction sector mitigation measures in the face of COVID-19
On 1 April, our construction team published an article outlining what mitigation would look like in extremely limiting circumstances imposed by COVID-19 and the Alert Level 4 lockdown. The article looks into mitigation across all levels: mitigation as an industry, collaborative mitigation steps taken by parties for projects, and the requirement for contractors to mitigate their loss.
Consultants and COVID-19 – Consequences, considerations and bouncing back
On 7 April, our construction team published an article setting out important considerations for design consultants in the context of the COVID-19 pandemic and lockdown. The article outlines key clauses in the standard ACENZ Conditions of Contract for Consultancy Services (CCCS) that may be triggered by COVID-19 and the Government’s lockdown response.
COVID-19: Employers can still make commercial decisions regarding their workforce
On 15 April, our employment team published an article addressing some of the “myths” around the Government’s COVID-19 Wage Subsidy and outlining how employers can still make commercial decisions about their workforce, so long as they act in good faith and consult with their employees. The article also outlines some of the common issues our employment team is discussing with employers post New Zealand entering the Level 4 lockdown.
COVID-19: Remobilising the construction sector
On 21 April, our construction team published an article outlining the preliminary considerations for construction organisations as they plan for remobilisation. This includes an overview of the health and safety matters the sector should be considering as part of their delivery planning.
COVID-19 Alert Level 3 Health and Safety Guide
On 21 April, our employment and dispute resolution teams published a guide that highlights key information for directors and officers, Persons Conducting a Business or Undertaking (PCBUs) and individuals as they navigate keeping people safe during Alert Level 3 and ensuring compliance with the Health and Safety at Work Act. Although the guide is not specific to health and safety in the construction sector, it provides a useful overview of the sector’s wider health and safety obligations.
Directors' duties and insolvency: Impact of COVID-19 for development and construction companies
On 23 April, our construction, corporate and banking teams published an overview of the measures that the Government intends to put in place to provide relief for company directors, including providing directors with a ‘safe harbour’ from their obligations under the Companies Act 1993 and the intended legislation for a ‘business debt hibernation regime’, and steps construction organisations can take to address some their current challenges, for example cash flow.
Construction workers return to work on Auckland Transport projects
Around 2,500 construction workers went back to work on Auckland Transport projects as the country moved into Alert Level 3 on Tuesday 28 April. This means that work is now underway for high profile projects such as Eastern Busway project, the Downtown programme, and Karangahape Road enhancements. Auckland Transport reopened 160 worksites across Auckland.
Key construction and transport projects to resume in Wellington
Work restarted on major projects across Wellington from Tuesday 28 April, including construction of Wellington's Convention Centre, the Town Hall, St James Theatre and the Te Awe Library. Building works will also resume on Brandon St, the Wellington Water pipeline project in Wallace St and transport projects around Cobham Dr and Evans Bay. The council will return to maintaining and tidying outdoor spaces.
Decmil Construction NZ in liquidation
Australian engineering group Decmil has shut down its New Zealand operations after being unable to resolve a dispute over a $185 million contract for Decmil to build cells in five prisons. Perth-based Avior Consulting was appointed as the liquidator of Decmil NZ on April 15. Decmil had liabilities with a book value of $11.9 million, out of which $11.7 million is owed to trade creditors. The company had assets with a book value of $6.9 million.
South Wairarapa council proposes $1.5 million loan to fund infrastructure stimulus
South Wairarapa District’s councillors have drafted an annual plan for consultation to help residents fight off the impacts of the COVID-19 economic downturn. The plan includes an average 2.5 percent rate rise and a $1.5 million loan to support key projects such as water infrastructure improvements, recreational facilities, upgrades to road and cycling paths and housing for seniors. Costs for the infrastructure upgrades will be spread over the next 5 years.
Construction of Palmerston North Quest Hotel back on track as lockdown lifts
Work on Palmerston North’s Quest is due to resume as COVID-19 restrictions ease. The 41-room hotel was just a month away from completion when the Level 4 lockdown stopped work. The hotel is the first example of the Rangitāne o Manawatū Investment Trust's increased economic heft since its $13.5 million Treaty of Waitangi settlement in 2017.
$25m proposal for two electric ferries to service Wellington airport
The project will provide Miramar Peninsula and Seatoun residents with a fast and reliable commuting option to the city, and easy access to Miramar Wharf.
Council keeps up pace on $150 million project to span Waikato River
Hamilton City Council is entering the final procurement phase of a $150 million project to build a new bridge over the Waikato River, south of Hamilton. The bridge will include walking and cycle lanes and will also act as a conduit for water and utility services. It will connect to Hamilton East and the city's ring road via a new interchange at Wairere Dr and Cobham Dr, now under construction. The bridge is expected to be completed in 2023.
Homeowner regrets taking ministers’ suggestion after losing quake tribunal case
A Christchurch homeowner who went to the Earthquake Insurance Tribunal on the recommendation of Government ministers, expressed disappointment in the media after losing his case. The Tribunal ruled against the Houston Trust who wanted the Government insurance company, Southern Response, to replace their family home's damaged foundations. In his decision, Tribunal Chair, Chris Somerville, ruled that Southern Response's proposed foundation repair method was “not unreasonable” because it was in line with the insurance policy and would likely obtain council consent.