5 Jul 2013

Dunedin council shuts construction arm

5:19 am on 5 July 2013

A Dunedin City Council subsidiary is closing its $20 million civil construction businesses so it can pay a higher dividend.

The plan by infrastructure company Delta is set to mean the end of jobs in Dunedin, Central Otago and Southland. It employs 580 staff.

Two weeks ago, the company sacked 40 workers when it closed its construction arm in Christchurch, citing lack of work.

On Thursday, it told another 77 workers it plans to close all three remaining civil construction units over the next six months.

The move, if confirmed after staff consultation, would mean the end of 41 jobs in Dunedin, 20 in Central Otago and 16 in Southland and the company said it could only transfer six affected staff to other parts of the company.

Delta chief executive Grady Cameron said a review of the entire company has shown that the civil construction units are not profitable and efforts to turn them around for the past 18 months haven't succeeded.

The company has been under pressure to generate a stable cash flow for the council and is consulting with workers until 12 July.

Delta's other units which manage assets, energy and environmental services are not affected.

The council held an extraordinary meeting on Thursday afternoon to approve the cuts.