Infracom backs Government measures to support construction industry

The Infrastructure Commission, Te Waihanga (Infracom) has welcomed the Government’s new measures to help keep the construction industry in business during the COVID-19 crisis. 

Earlier today Minister for Building and Construction, Jenny Salesa wrote to all Ministers and Government agency Chief Executives outlining new contract management guidance which recognises the move to Level 4 lockdown as a variation to a standard contract.

“This is a significant move by the Government, which Infracom is delighted to see take effect. We’ve been working hard behind the scenes to bring this to fruition and want construction businesses able to get back to work as soon as it’s safe to do so. These payments will go a long way towards helping,” says Infracom Chair, Dr Alan Bollard.

Under the terms of their contracts, construction companies will be entitled to recover time and costs resulting from the lockdown period. Establishing the value of these claims will be complex and require case-by-case assessment of affected projects.   

Dr Bollard says today’s announcement is a significant step towards maintaining viable businesses which can get back to work at the earliest opportunity.

“Construction firms with Government contracts have been looking for a consistent commercial approach where they’ve been forced to close with the lockdown,” Dr Bollard says. “Recognising the move to Level 4 as something out of their control is a big step. The additional requirement to support the supplier workforce and make sure funds move down the value chain is also vital.”

Infracom has placed the guidance on its website. Its Major Projects and Advisory team which supports the procurement of projects over $50 million will work with the Ministry of Business Innovation and Employment to help Government departments work through the new rules.  

Infracom is committed to assisting New Zealand’s response and recovery as part of both the Construction Sector Accord and the Infrastructure Industry Reference Group. The Accord’s Construction Sector Response Plan was released yesterday and this guidance is a first practical step in that plan.