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Sunday, April 24, 2011

Carrot and stick for rebuilding on time

Carrot and stick for rebuilding on time

Last updated 05:00 25/04/2011
Companies involved in rebuilding Christchurch's shattered infrastructure may get financial rewards for finishing their jobs on time and under budget.

But a proposed contracting model, to be debated by the Christchurch City Council this week, could also impose "sanctions" on contractors who do not meet pre-set targets.

The alliance-type delivery model, which council staff say has successfully worked elsewhere in New Zealand, would handle the estimated $3 billion infrastructure rebuild throughout the city.

The five major construction companies signed to handle the post-September 4 earthquake damage would be kept under the new "city-wide alliance agreement" conceived by council chief executive Tony Marryatt who would, if the council agreed, be authorised to sign up key construction companies.

The new Canterbury Earthquake Recovery Authority (Cera) has given the council responsibility for repairing the damaged water, stormwater and sewerage systems.

Council legal services solicitor Ian Thomson, in a report to Thursday's council meeting, said the alliance model was a form of collaboration between clients, consultants and contractors who agreed to set levels of quality, cost and time.

With so much at stake, it was working alongside the New Zealand Transport Agency (NZTA), who had successfully used the alliance model.

The rewards and sanctions component led to a high degree of trust between the parties "and a focus on performing to the highest expectations," Thomson said.

The council successfully used "alliancing" on its City Mall project last year.

Thomson said damage to underground services and roads had almost quadrupled compared with the September 4 earthquake and was more widespread. "The significance of the aftershock of February 22 has demanded a different response from both central and local government."

The new enlarged contract would include power, telecommunications and other basic infrastructure, but repairs involving the city's wastewater treatment plant, ocean outfall facility, compost facilities, landfills and buildings would be handled separately.

Thomson said the alliance would work by showing there was value in taking an integrated approach to rebuilding Christchurch.

The model had enough "checks" at agreed milestones to confirm value for money and the benchmarking of labour, plant and materials increased competition between head contractors.

The new alliance would report to the council and Cera, although the council retained control as it owned the assets.

The infrastructure rebuild project would be funded through a combination of insurance, government subsidies and increased council borrowing, Thomson said.

Marryatt would be required to regularly report to the council on its progress. Cable workA15

- The Press

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