Christchurch Three Years On: Local steel suppliers warn of import threat

Steel framing has become a more common rebuilding material in Christchurch since the earthquakes.

The structural steel sector has increased its share of the Christchurch multi-level construction market to more than 60% from virtually nil a few years ago. 

The big challenges facing the industry include the price of imports and the perception the industry doesn’t have the capacity to cope with the rebuild.

Industry proponents have promoted steel as a building material with recognised performance in seismic-prone areas. 

There are about 80 steel fabricators nationwide and they say they have ample capacity to meet the needs of the rebuild. 

Current annual output is still 30% below 2008’s peak output of 80,000 tonnes. It is estimated that 20,000 tonnes will be required for the Christchurch central business district rebuild over the next decade. 

However, the growing demand from procurers for imported prefabricated steel is a worrying trend, given its uncertain quality, according to Alistair Fussell, manager of Steel Construction NZ Incorporated. 

Mr Fussell says companies that want to import prefabricated steel need to be aware of the quality risks.

He says there are several recent projects which have used imported product and which have subsequently required expensive and time-consuming testing to demonstrate compliance and in some instances required remedial work

“That’s why we welcome the government’s new procurement rules, which introduce a focus on achieving value for money over the life of projects rather than a focus on the cheapest upfront cost

“The new rules, together with our ongoing investment in research and development, and initiatives such as a procurement tool and a steel fabricator certification scheme will help procurers make more informed decisions and provide the industry with a strong point of difference,” he says. 

Mr Fussell cites the main points of difference as innovation from investment in research, technology and people; delivery and accountability; a robust quality assurance framework, and value.

Recently completed Christchurch projects, or projects in development using locally fabricated structural steel, include the recently completed Forte Health medical centre in Kilmore St, commercial buildings at 335 Lincoln Rd and 219 High Street, the Botanical Gardens Visitor Centre and the Isaac Theatre Royal.

From October 2013 new rules came into force to streamline procurement rules for all public service departments, including the Christchurch Central Development Unit of the Canterbury Earthquake Recovery Authority and its anchor projects. 

A big change is the emphasis shifting from achieving the lowest upfront cost to achieving the best value for money over the life of the project. 

Mr Fussell says this will help address a major threat to the local steel industry from cheap, prefabricated structural steel imported from Asia, “which is often of an unproven or inferior quality to our own. 

“While at face value imported prefabricated structural steel may offer lower upfront costs, the reality is often very different when poor-quality product requires additional testing, consultant time and remediation work – additional costs which, in the case of public sector projects, are ultimately borne by ratepayers and taxpayers.

“We have taken the initiative to help procurers evaluate the whole-of-life value of projects. Our partner, the Heavy Engineering Research Association, commissioned BERL economists to develop a procurement tool for construction projects.”

This enables procurers to assess competing bids to which different weightings can be assigned – price, quality, whole-of-life costing, corporate responsibility and local content. 

The industry is finalising plans for a steel fabricator certification scheme, which will be launched in the third quarter of 2014. Based on the ISO system, the scheme aims to provide public and private sector procurers with certainty that the certified fabricator meets international best-practice quality standards.