Latest news with #EarlyContractorEngagement
Otago Daily Times
03-07-2025
- Business
- Otago Daily Times
Govt and construction giant reach agreement on hospital build
Australian construction giant CPB is set to build the new Dunedin hospital inpatient building after years of fraught negotiations and government dithering. The inpatient building was originally tabled as necessary in a business case to the government in June 2017, but since then there have been rising costs and changes in ministers and project bosses. Now, a "letter of intent" has been agreed between Health New Zealand Te Whatu Ora (HNZ) and CPB, meaning the firm should be awarded the contract to deliver the building on the former Cadbury site. A letter of intent can also mean a firm can work on a project prior to the contract being signed. There are already diggers back on site — working on the building's foundations — and billboards proclaiming CPB's involvement went up around the perimeter yesterday. The action on-site means that at least one ministerial promise has come true. In January, after the latest round of delays and a public march by thousands last year, health minister Simeon Brown promised work would resume mid-year. Dunedin Mayor Jules Radich said the build should have happened in 2018, but described the activity on-site as "very exciting after such a long delay ... hopefully, it means a rapid resumption of work — the sooner the better." CPB had expected to sign a contract at the start of 2023, after it had already spent 18 months delivering an Early Contractor Engagement contract (ECE) for the project. The ECE, signed in August 2021, had required it to plan the build and pull together a team of subcontractors. For the past two years, the firms have been waiting for a minister to approve the project and CPB has been involved in government discussions about contract details. CPB has a history of delivering government projects that have resulted in challenges down the track, including rising costs, delays and legal wrangles. Projects have included the North Island's Transmission Gully motorway, the Christchurch Hospital acute services building and the Christchurch Parakiore sports centre, which CPB had claimed was costing more than three times as much to build as originally contracted. In April last year, the ODT unearthed a government briefing about the new Dunedin hospital, from treasury officials to finance minister Nicola Willis, saying HNZ was "reconsidering whether to continue" with CPB on the inpatient build, despite being the preferred contractor. Since the Treasury note, there have been further delays, including redesigns aimed at achieving savings and even a review of whether the build should go ahead. The work on site is led by construction firm Ceres, which holds the contract for some of the building's substructure. It is highly likely that Ceres will finish its part of the contract then hand over to CPB for completion of the main build. Although there was a recent tender for a part of the substructure, sources say they do not anticipate a third main contractor will lead any part of the substructure's build. However, Mr Brown said the contract for the substructure works had not yet been awarded.
Otago Daily Times
02-07-2025
- Health
- Otago Daily Times
Finally — contract for inpatient building awarded to CPB
The contract with construction firm CPB to build the new Dunedin hospital's inpatient building is on the horizon, as billboards proclaiming the firm's involvement went up yesterday around the former Cadbury factory site. PHOTO: STEPHEN JAQUIERY Australian construction giant CPB is set to build the new Dunedin hospital inpatient building after years of fraught negotiations and government dithering. The inpatient building was originally tabled as necessary in a business case to the government in June 2017, but since then there have been rising costs and changes in ministers and project bosses. Now, a "letter of intent" has been agreed between Health New Zealand Te Whatu Ora (HNZ) and CPB, meaning the firm should be awarded the contract to deliver the building on the former Cadbury site. A letter of intent can also mean a firm can work on a project prior to the contract being signed. There are already diggers back on site — working on the building's foundations — and billboards proclaiming CPB's involvement went up around the perimeter yesterday. The action on-site means that at least one ministerial promise has come true. In January, after the latest round of delays and a public march by thousands last year, health minister Simeon Brown promised work would resume mid-year. Dunedin Mayor Jules Radich said the build should have happened in 2018, but described the activity on-site as "very exciting after such a long delay ... hopefully, it means a rapid resumption of work — the sooner the better." CPB had expected to sign a contract at the start of 2023, after it had already spent 18 months delivering an Early Contractor Engagement contract (ECE) for the project. The ECE, signed in August 2021, had required it to plan the build and pull together a team of subcontractors. For the past two years, the firms have been waiting for a minister to approve the project and CPB has been involved in government discussions about contract details. CPB has a history of delivering government projects that have resulted in challenges down the track, including rising costs, delays and legal wrangles. Projects have included the North Island's Transmission Gully motorway, the Christchurch Hospital acute services building and the Christchurch Parakiore sports centre, which CPB had claimed was costing more than three times as much to build as originally contracted. In April last year, the ODT unearthed a government briefing about the new Dunedin hospital, from treasury officials to finance minister Nicola Willis, saying HNZ was "reconsidering whether to continue" with CPB on the inpatient build, despite being the preferred contractor. Since the Treasury note, there have been further delays, including redesigns aimed at achieving savings and even a review of whether the build should go ahead. The work on site is led by construction firm Ceres, which holds the contract for some of the building's substructure. It is highly likely that Ceres will finish its part of the contract then hand over to CPB for completion of the main build. Although there was a recent tender for a part of the substructure, sources say they do not anticipate a third main contractor will lead any part of the substructure's build. However, Mr Brown said the contract for the substructure works had not yet been awarded.
Otago Daily Times
27-06-2025
- Business
- Otago Daily Times
Change in leadership team: Another project boss back
Yet another former boss of the new Dunedin hospital has swung back into the revolving door of its leadership team, sources say. It is understood that former programme director Tony Lloyd was let go from the role last November but is back working on the long-delayed inpatient building again. He first joined the build in June 2022. Mr Lloyd, director of AGL Consulting, joins energy company Todd's boss Evan Davies, who resigned from chairing the build's governance board in June 2023 but returned as Crown manager of the project this month at the behest of Health Minister Simeon Brown. Both men have hospital construction experience, including in Christchurch. However, some sources in the construction industry expressed concern about the two men's comeback in Dunedin, due to the project's overall slow progress. One said: "This smells of positions for mates and corporate interests while the project and people suffer. What confidence can the government give to the South that the build is being managed competently?" Other sources blamed turgid and complex command lines at Te Whatu Ora Health NZ (HNZ) for the project's slow-go, rather than Mr Davies and Mr Lloyd's leadership. There had been "paper pushing and pontificating" up the chain. Minutes from the project's board when it was headed by Mr Davies complain about the problem. During the duo's previous reign, they worked with construction giant CPB which has been planning the build under an Early Contractor Engagement (ECE) agreement that began in August 2021. It was meant to progress to a building contract by early 2023, but it did not happen. Mr Davies, who originally joined the build in December 2020, jumped ship in June 2023 claiming a demanding day job at Todd. In response to a question about the return of Mr Lloyd, Mr Brown said Mr Davies had "full authority" for the inpatient build now, including "making personnel decisions necessary to get the job done". In a separate comment about Mr Davies' reappointment, Mr Brown said the Crown manager role would be easier than Mr Davies' previous hospital role because it was "substantially more limited". The new role was focused on getting the inpatient building constructed. In March last year, prior to Mr Lloyd's departure, an Infrastructure Commission general manager Blake Lepper shifted to be HNZ's head of infrastructure delivery and was consequently named senior responsible officer for the Dunedin hospital project. In March last year, prior to Mr Lloyd's departure, an Infrastructure Commission general manager Blake Lepper shifted to be HNZ's head of infrastructure delivery and was consequently named senior responsible officer for the Dunedin hospital project. When asked last November to comment on Mr Lloyd's exit from the role of programme director, Mr Lepper said HNZ had "looked closely" at the hospital build's management and thought "a different approach is needed". HNZ had signed a letter of intent with Crown Infrastructure Delivery (CID), a company mandated to help agencies struggling to deliver infrastructure, he said. Mr Lepper is understood to have then led the reconsideration of a fixed-price approach to the contract and a ward block refit rather than a new build. The former is thought by some other construction experts to be inadvisable, and the latter is definitely off the table and had been previously. An HNZ spokesperson failed to answer questions about the appointment of Mr Lloyd and whether Mr Lepper or CID were still working on the build. The HNZ spokesperson said the agency was "confident we have the team in place to deliver this modern healthcare facility for the people of the South".
Otago Daily Times
22-06-2025
- Business
- Otago Daily Times
Hospital stall due to contract
The government bungled the opportunity to crack on with the new Dunedin hospital's in-patient building last year by blowing up contract negotiations in sight of the finish line, sources say. It is understood a type of shared-risk deal was previously being nutted out with global construction giant CPB, meaning any overspend above a threshold would be shouldered by both government and CPB. Contract signing with Health New Zealand Te Whatu Ora (HNZ) was close but, sources say, negotiations stalled around the time government ministers came to Dunedin in September, announcing there had been a blow-out of the hospital's $1.88 billion budget. A fixed-price deal was then sought from CPB. It was the type of deal government had originally hoped to achieve when the project was conceived seven years ago and prices were lower and fluctuated less. The flip-flopping was condemned by former Labour health minister and hospital campaigner Pete Hodgson. Mr Hodgson said it risked CPB now walking away from the deal — with the government having no guarantee of a cheaper deal with another contractor — causing further delays. "The government would have to re-engage the market with the reputation of being a risky client, always changing its mind ... and if CPB can't pull it together with their array of subcontractors, it seems unlikely anyone else would be able to." CPB, which has many contracts overseas and consistently declines to comment about the Dunedin hospital negotiations, had agreed in 2021 to an Early Contractor Engagement (ECE) contract to plan the inpatient build. There was an expectation it would then be contracted , with work starting in 2023 — but two years on, it still has not happened. CPB has successfully built a hospital in Christchurch, but it has not always had cordial relations with the government — two CPB government-commissioned construction projects have resulted in legal wrangles. Multiple sources have told the Otago Daily Times that a shared-risk contract for the Dunedin hospital build had been discussed with CPB for years. Construction experts, engaged by government to help seal the deal, had advised that a shared-risk contract would likely prove the cheapest, and deliver the best build outcomes, through a collaborative client-contractor relationship. It is understood that the experts included Evan Davies, Todd Corporation boss, who led a new Dunedin hospital governance committee from December 2020 until mid-2023 and who was last week brought back by Health Minister Simeon Brown to lead the build project as Crown Manager. According to sources, CPB wanted a shared-risk contract and its senior managers have also stated, in public forums, fixed-price contracts can be inappropriate for large, complex builds due to pricing variables. A shared-risk contract means the contractor does not need to charge a premium to cover its risk exposure and the public purse benefits from any cost savings achieved, possibly countering any over-spend. After the last election, construction expert Robert Rust was commissioned to review the project. His report, published in May last year, pointed some blame for the project's delays at poor governance and explained that a "target total cost" model was being proposed. The model would provide a "threshold for any potential pain or gain sharing". In January this year, two months after the project's latest programme director left, and four months after former health minister Dr Shane Reti and Infrastructure Minister Chris Bishop came to Dunedin with their budget blow-out announcement and pressed pause on the build, Mr Brown said it would go ahead within budget and with cutbacks. It is unknown if the cutbacks were due to concerns about being saddled with a premium-laden fixed price above budget. No timescales for the build have been announced by HNZ but Mr Davies' role as Crown Manager requires him to seal a contract within three months.
Scoop
17-06-2025
- Business
- Scoop
New Construction Partner Announced For Scott Base Redevelopment
Antarctica New Zealand is pleased to announce LT McGuinness has been selected as the Early Contractor Engagement (ECE) contractor to assist with the design and delivery of the Scott Base Redevelopment. With over 70 years of construction experience, the New Zealand company has a proven track record for delivering some of the country's most complex and high-profile projects across both public and private sectors. Antarctica New Zealand Chief Executive Prof Jordy Hendrikx says the appointment is an important step forward for this legacy project. 'A technically challenging project like this provides an opportunity for all parties to bring their very best, and we've already had a high level of engagement with LT McGuinness on preliminary discussions. Supported by a growing workforce of long-term, permanent staff, their experienced team has the highly technical capability and practical approach required. 'On top of that, being a third-generation family construction company aligns with the culture of Scott Base and the history of our Antarctic programme.' The ECE phase is a critical part of the project lifecycle, where technical partners collaborate to understand the project's full requirements before detailed decisions are made. This ensures robust planning providing greater certainty around cost, the programme and identification of risk as the design progresses. LT McGuinness has engaged global infrastructure leader Parsons Corporation to provide technical assistance on the project. 'Parsons' polar operations experience spans programme and construction management, engineering and planning, and logistics. The company's key role in the redevelopment of McMurdo Station will provide us with a wealth of lessons learned from past projects,' Prof Hendrikx says. He adds that LT McGuinness's digital capability will be essential for this next phase of work. 'Projects of this complexity and scale require advanced digital tools and methodologies. LT McGuinness brings proven expertise in using digital delivery systems to enhance coordination across partners and ensure quality outcomes – critical in remote environments like Antarctica.' Antarctica New Zealand was very pleased with the number and quality of responses to the ECE Request for Proposal, Prof Hendrikx says. 'We're grateful six top construction companies from around New Zealand devoted significant time and resources to bid for our work, and we saw this as a hugely positive endorsement of the direction the redevelopment is now headed.' The announcement marks another milestone for the project. In May, the new Scott Base Redevelopment Masterplan approach was approved, and the team is working towards submitting a Detailed Business Case to Cabinet in mid-2026. The masterplan proposes a three-stage redevelopment of Scott Base over the next 20-50 years, starting with the oldest and most dilapidated facilities. As part of Stage 1, a new Base Services building will be constructed for living and accommodation, with the Hillary Field Centre refurbished for science activity. Critical plant and services will be replaced or upgraded, along with the replacement of the Ross Island Wind Energy system to help power Scott Base and McMurdo Station. Stage 1 is due for completion by 2030 ensuring a functional and fit-for-purpose base. Concept design was completed in March 2025, and the team is now in the second design phase (Preliminary Design).
