Piritahi One Year On

The alliance has a single client - Kāinga Ora – Homes and Communities - but multiple projects. The aim when forming the alliance was to streamline the delivery of build-ready residential land in Kāinga Ora’s large suburban redevelopment projects. In turn, lower land development costs should bring the cost of delivering new state and market housing down. So, how is Piritahi tracking, one year on?

In 2018, with numerous large scale civil infrastructure projects coming on stream across Auckland, Kāinga Ora’s project teams were working relatively independently of each other to engage consultants, put programmes of work on GETS (the government tendering portal), go through the tender process and manage contractors in multiple  traditional ‘measure and value’ contractual relationships.

“One of the core functions of our business is to procure civil engineering to provide build-ready land so that others can then come and build homes, whether it’s state homes, affordable homes or market homes,” says Kāinga Ora’s Mathew Tucker, General Manager Civil Construction. 

“The way we were procuring civil engineering was just about OK at the scale we were at a year and a half ago, but we could see that we couldn’t continue like that. We did a calculation and realised we’d soon have to employ another 70-80 people to manage all of those upcoming multiple construction project interactions unless some degree of standardisation occurred across that whole process in Auckland.”

The other chief issue with the old way of working was that it was often adversarial, says Tucker. “The way construction work is procured is often not fit for purpose in New Zealand  – old style confrontational, ‘them and us’ forms of contract. Risk isn’t well allocated and when things don’t go well construction companies can go bankrupt.” 

“We’re a land developer; we’re not a civil construction project manager. We knew we wanted to outsource our civil construction to the specialists. We also knew that we needed to aggregate all the work into one place so that it got done consistently, robustly and lessons were learned and shared.”

Tucker credits what was then-HLC’s (now part of Kāinga Ora) General Manager – Commercial and Finance, Neil Mayo with first championing the alliance model in order to maximise collaboration and innovation “rather than any alternative contractual framework where people still argue with each other, just on a larger scale. Neil quickly convinced our CEO Chris Aiken that Alliancing was the way to go.”

Civil works alliances aren’t unusual in New Zealand for single projects – the Waterview Connection, for example – but only one or two others have been formed to deliver a large programme of work covering multiple projects, eg SCIRT (Stronger Christchurch Infrastructure Rebuild Team). Tucker worked on SCIRT and says he’d never go back to working the old way. 

It’s still early days but the benefits of the alliance model are already becoming apparent. In a little over one year Piritahi has handed over 32 superlots or 71,500 m2 of build-ready land, which equates to future yields totalling 468 new homes.

“The beauty of a programme alliance is rather than setting a budget for one thing we have numerous projects around town and as we go we learn lessons that can be applied to the next project. Things get honed quickly. It’s a really good model to keep learning, changing and innovating and ratcheting performance up.”

By way of example he cites the removal of old state houses to clear the land for redevelopment. There are about 7,000 houses that need demolishing, deconstructing or relocating across Auckland. Since March 2019 Piritahi has removed 97 homes and is steadily shifting the balance away from demolition and toward either deconstructing homes or relocating them. 

“When you relocate houses, people will tell you they’ll take them, but timing and coordination is critical when you’re coordinating a relocation with the section in, say, Northland or Waikato. Because of the scale of our urban development projects we now have lay down areas. We have enough volume that we can hire a yard to move 50 houses to.”

Tucker is especially excited about the work that has been done around deconstruction. Piritahi is working with TROW Group, an organisation that designs public buildings such as schools in Tonga. They deconstruct homes here that have the materials that suit their needs and then use those materials to build or upgrade buildings over there. 

”Nobody has had the scale to do that before in New Zealand,” says Tucker “The best part of it is that we’ve almost got it to the point where the cost to deconstruct a house and send the materials to the islands is the same as the cost to demolish it.” 

Piritahi has also made big efficiency gains in the processing of land that has been impacted by human use. Building practices and materials used during the early to mid part of the 20th century means many of the old state housing sites have some level of contamination in the soil, like lead or asbestos. The simplest approach to this problem on a large scale is to strip the maximum required 300mm of soil off every site, but that would come at a cost of approximately $710m over the life of the programme. 

Piritahi has been set the task of optimising this process. Rather than the standard industry approach of employing a soil testing company and waiting for the results to come in from the lab, Piritahi has upskilled inhouse. This, combined with the purchase of three FRX scanner devices that detect metals in the soil at a cost of around $100,000, will save $5m over five years.

“Piritahi is an excellent example of the fundamental principles of the Construction Sector Accord. It is collaborative; we’re innovating; risk is really well managed and allocated to those people best equipped to deal with it; and there’s a lot of upskilling and investment in plant and equipment going on.” 

That upskilling extends to the communities the developments are happening in - currently Northcote, Mt Roskill, Ōwairaka, Mangere and Oranga - via Construction Plus, a programme that encourages and then supports locals into construction jobs within the development. 

Piritahi has grown from a dozen or so people in late 2018 to over 220 today - a steep curve. Tucker says it has taken all of 2019 to get momentum up and get to the point where they can start assessing performance, but it’s definitely trending toward lower design and construction costs than they would have had managing one project at a time themselves. 

Soon Piritahi will start work on the Tāmaki Regeneration programme and Kāinga Ora will be considering setting up a similar alliance in Wellington for the redevelopment of Eastern Porirua. That programme will aggregate a further $500-$700m worth of infrastructure spending over the next 10-15 years. 

Tucker says it’s extremely satisfying to be part of an alliance working at this scale and to know that the outcome of the work is better neighbourhoods and more warm, dry homes for Kiwis. 

“I can’t be bothered with the time that’s wasted on old traditional construction contracts with everybody arguing about what is whose fault. None of that ever produces a useful outcome. I love this work. I get to be part of making things that are incredibly useful and meaningful to people. That is a neat legacy for all of our team involved in this programme.” 

Piritahi is:

• Dempsey Wood
• Harrison Grierson
• Hick Bros Group
• Kāinga Ora Homes and Communities
• Tonkin + Taylor
• Woods