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Govt dangles sweeteners in pitch for KiwiBuild offsite manufacturers

Thursday 6th September 2018

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The government is dangling access to Regional Economic Development Minister Shane Jones's provincial growth fund in an effort to lure firms interested in setting up offsite manufacturing (OSM) factories to back the KiwiBuild construction programme. 

The Ministry of Business, Innovation and Employment's KiwiBuild unit today issued an invitation to participate (ITP) for offsite manufacturers to support the construction of 100,000 houses over the next decade. Housing Minister Phil Twyford foreshadowed the tender in June, saying he'd been approached by a number of foreign and domestic firms already using offsite manufacturing for rapid construction, and the New Zealand Superannuation Fund has shown an interest in investing in prefabricated housing. 

KiwiBuild wants ideas and proposals from potential suppliers and consortia to support the programme, and sees this move as part of a wider government strategy to use its buying power "to increase productivity and drive innovation gains in the building and construction sector". Ultimately, it seeks to cut construction costs, deliver consistent quality, boost capacity and accelerate building times. 

The government wants to de-risk the capital-intensive investment in offsite manufacturing and is willing to offer financial support and other assistance if suppliers can meet its goals. That includes facilitating "access to other sources of government financial support such as the Provincial Growth Fund and assistance with the mitigation or removal of barriers and constraints identified by respondents," the document said. 

KiwiBuild head Stephen Barclay said offsite manufacturing has been considered a "potential game-changer" for a long time. 

"When we look at the proposals, consistent quality will be a high priority, alongside the other inherent benefits that OSM should offer, such as reduced construction costs and speed to market," Barclay said. "If you combine our approach to this procurement process with the government’s commitment to share risk and enable delivery, then I think we’ll see this ITP generate some really compelling, innovative, solutions-oriented proposals when it comes to offsite manufacturing, and we welcome that."  

Responses are due by Nov. 12, with a shortlist to present to an evaluation panel in the first quarter of next year. 

"Following this, there will be a period of negotiation with successful respondents to work through terms of engagement, the duration of which will be determined by the scale and complexity of the proposal," the KiwiBuild document said. 

(BusinessDesk)

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