17 Jul 2013

Chinese firm signs deal over rebuild

10:31 pm on 17 July 2013

A Chinese construction company has entered a partnership with a New Zealand firm to work on the rebuild of earthquake-hit Christchurch.

Arrow International and China State Construction Engineering Corporation (CSCEC), the second largest company of its type in the world, have signed a memorandum of understanding to work on some of the city's major buildings.

Arrow International group chief executive Hugh Morrison said on Wednesday that CSCEC has been involved in major construction projects around the world including the Hong Kong International Airport and the Shanghai World Trade Centre.

He said the partnership would provide access to a highly cost-effective supply chain, as the Chinese corporation owns steel mills and fabrication factories, and gave an assurance that the joint venture won't mean sub-standard steel will make its way into Christchurch.

"When you raise the quality question to China State Construction and you look out a window at a couple of 500-metre-tall towers, it's a bit embarrassing to have that conversation. Quality is upper-most in their minds as part of the reputation they want to build."

Mr Morrison said residential construction costs are already rising by more than 10% a year, as a direct result of resource shortages, and it is critical that access is opened to alternative resources to deliver genuine cost savings.

He told Radio New Zealand's Checkpoint programme if there is a labour shortage due to the rebuild, then Chinese construction workers may be hired.

"At the moment that's not our focus, but we're aware that's a risk that's coming to Christchurch and Chinese labour is one option to deal with that risk."

CSCEC's total annual construction turnover exceeds $NZ100 billion, with $NZ15 billion outside of China. Arrow International turns over more than $NZ250 million in construction projects.