12 Feb 2013

Construction council believes competition will continue

4:24 pm on 12 February 2013

The head of the Construction Industry Council does not think the collapse of Mainzeal will cause an imbalance in the sector.

Mainzeal Property and Construction went into receivership last week and about half of its 400 employees have been made redundant.

The collapse leaves Fletcher Construction and Hawkins Construction as the only two large building companies in New Zealand.

But Construction Industry Council chairman Pieter Burghout said there would not be a lack of competition, because medium-sized regional companies would step in to fill the gap.

Mr Burghout said the number of people laid off seems almost to exclude the option of selling Mainzeal intact and if the receivers were thinking that the company might be able to trade its way out of trouble they would not have shed so many staff.

However, Mr Burghout believed most of those laid off would find new jobs quickly.

Arrow International chief executive Hugh Morrison says his and other medium-sized construction firms have the capacity to fill the space left by Mainzeal.

Mr Morrison said he suspects some companies will buy some of Mainzeal's assets if it is broken up, but thinks it unlikely that any will try to take over the company completely.

ACC taking over claims

The Accident Compensation Corporation is taking over responsibility for Mainzeal workplace injury claims.

Mainzeal was self-insured before entering receivership, which means the company was responsible for supporting employees injured on the job.

ACC has made itself directly responsible for current and future injury claims and has terminated its accredited employer contract with Mainzeal.