Aussie firms could buy Mainzeal - Joyce
There is likely to be plenty of competition to buy failed construction firm Mainzeal, Economic Development Minister Steven Joyce says.
And there is no need for the government to "step in further at this stage", he told NBR ONLINE.
The prospect of the firm being bought by one of the two larger construction firms, Fletcher Building or Hawkins Construction, has been raised and if this happens there is likely to be the issue of too many large firms in too small a market.
However, Mr Joyce says there will be no shortage of firms wanting to buy Mainzeal – and a buyer from across the Tasman would avoid competition issues.
“My own view, and it is a personal view, is there will be a number of people looking at the property. There are one or two firms, not just New Zealand firms but Australian firms, who would love to have a stronger presence here,” he says.
The Canterbury reconstruction, and to a lesser extent the pent-up demand for building in Auckland, means there is large line-up of work in the pipeline.
That is one of the reasons the government has seen no need to step in further at this stage. The amount of work over the next few years means those who lose their jobs will be snapped up elsewhere and there is also not likely to be any hit to economic confidence from the demise of such a prominent firm.
“It would have been different if this had happened in 2008-09 as that would have raised confidence issues. I don’t know much more than the next guy about the causes of this but what I have heard suggests the reasons for this seem to be pretty particular to the company concerned.”
Mr Joyce met receivers of Mainzeal Construction, PriceWaterhouseCoopers, earlier today and says the failure of the firm, while not pleasant, is not likely to have a major detrimental effect on the economy or on the industry.
The government's main immediate concern has been the impact on sub-contractors locked out from building sites and unable to retrieve their tools.
“They do understand this is people’s livelihoods – they had to make decisions consistent with their statutory obligations but they are treating the situation of the subcontractors with some urgency.”
The government is “keeping a close eye on this,” he says, but the next step is to allow the receivership process to take its course.