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Calls for change after collapse of another major NZ construction company


Construction industry insiders say change can't come soon enough after the collapse of another major New Zealand building company.

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Arrow went into voluntary administration yesterday. Source: 1 NEWS

Arrow went into voluntary administration yesterday, leaving the company's building sites idle.

Arrow's downfall has left 250 workers in limbo as administrators BDO move in. 

Contractors and experts spoken to today by 1 NEWS say many within the industry are on edge, worried about who owes them what and who might be next to fall.

And they are warning there could be more litigation for construction bosses if changes aren't made, and fast. 

"It's right from central government procurers, local government procurers and private clients as well, and the construction industry itself actually making a change around how we collaborate more," Peter Silcock of Civil Contractors New Zealand said.

Arrow's board blames a recent Building Disputes Tribunal decision, reported to have left the company with a multi-million dollar bill.

Razor thin margins and pressure to cut prices as low as possible are also contributing factors to tough trading conditions. 

"We've got a real skills shortage. So managing these difficult, challenging contracts where lowest price [is required] and you're taking on the risk is very difficult when you haven't got experienced people," Mr Silcock said.

Companies such as Christchurch's Smith's Crane and Construction have been burnt before.

"Mainzeal another $1.4 [million]. Hawkins under McConnell family ownership, they owe me about $1.2 [million]. And this is a smaller one, thankfully. They owe be $0.2 [million] at the moment. So it's not much fun," Tim Smith of Smith's Crane said.

With four cranes now sitting idle on Arrow sites, Mr Smith says he's sick of "good honest Kiwis" being the ones to suffer.

"Just unreasonable that the risk gets passed down onto those guys. The risks should be with the main contractor. The laws in New Zealand are flawed," he said. 

But until change is made, the fear is there'll be more construction sites sitting quiet.