SH1 - Pegasus Ravenswood Roundabout, North Canterbury
Procon’s role:Contract negotiation
, Cost monitoring and control.
Procon acted on behalf of the two developers financing the construction of this NZTA project; finalising the initial contract arrangement between the 3 parties, and then monitoring the costs and reporting back to the developers as the design was progressed.
I see Chris Trotter is peddling the re-establishment of a Ministry of Works (MOW)
, just like decades past when most work was done by government rather than private contractors.
Aside from an ideological bias (towards more government being the solution to any problem), there are several holes in his argument:
1. Some look at back at the MOW days with fondness, justified to some degree because it was era where do-ers got in and did things without endless delays and bureaucracy. But the reason that has ended has nothing to do with private contracting, and everything to do with the RMA and a more regulated environment.
2. Anyone who knows civil contracting and has been part of a tender process, knows that every contractor will generally see a job differentially in terms of the most efficient and cost effective way to deliver the result, and you'll get a wide variety of prices. Under a competitive tender situation the contractors are encouraged to find cheaper ways of doing it, and the more efficient/less costly proposals generally get the work. When it's a government department there's no such motivation.
3. Anyone who talks to ex MOW workers will generally hear stories of inordinate waste (i.e. point 2 is not just theoretical, it's backed up by what actually happened) in the MOW days.
4. The profit margin that Chris frets about going into private hands is a marginal component in the context of the issues above. Typical margin for a competitive NZTA contract for instance is 5-10%, often less, and sometimes the contractor will lose money. It's of no value to 'gain' that 5-10% profit margin but then actual costs to do the work ends up being say 50% higher.
Some talk about how service levels have dropped in recent decades, for instance when it comes to the maintenance of rural roads - and blame that on private contracting. However any drop in service standards has nothing to do with private contracting and everything to do with the specification written by Council - which is under increasing pressure to cut costs, because our rates are increasingly being consumed by bureaucracy rather than core services.
You'd think that after the lessons of the 20th century, such as the fall of Communism, the failure of Socialism anywhere in the world to deliver anything but poverty; and to a lesser degree what's happened post earthquake with Christchurch - that people would have learnt that government control of the economy never works, and never will. But judging may many comments on his thread, who enthusiastically support Trotter's suggestion, it looks like that lesson may need to be learned again in the 21st century.
It was reported in the Christchurch Press this week that over $300m of projects have been delayed by Christchurch City Council (CCC), many of which sounded like civil rather than building projects. What's the cause of the delay? According to one of their managers, "many delays were because of a lack of available contractors". Really? My experience is completely the opposite at the moment, at least for civil contractors. Right now there seem to be a lot of civil contractors out there desperate for work, who are considering laying off or relocating staff if they don't find any soon - and putting in very competitive tenders with minimal profit as result. This is presumably due the wind-down in SCIRT earthquake work that the industry geared up for.
If you're a property owner looking to get civil engineering work done, now is a great time to be tendering your project. As for the cause of the delays in the Council projects, bureaucracy seems a much more likely explanation.