Housing NZ questioned over Irish prefab plans

Updated

Housing NZ is planning a move to multi-year contracts with suppliers - but it's staying quiet on its discussions with an Irish company. Photo: Lynn Grieveson.

An Irish company is rumoured to be in the box seat to provide thousands of prefabricated houses to Housing New Zealand - leading to fears Kiwi businesses may be left out in the cold.

A Fast House employee has said the firm is “close to finalising” a deal - but Housing NZ has refused to comment on its discussions with the company.

Labour housing spokesman Phil Twyford told Newsroom he had heard from sources in the construction industry that Housing NZ was close to signing off a deal with Ireland-based Fast House.

The deal, to provide 3500 panelised houses over several years, could be worth about $1 billion, Twyford estimated.

He said it was hard to understand why Housing NZ would turn to an offshore supplier instead of local businesses, who could ramp up their production to meet demand.

“There are New Zealand companies who are gagging for orders of that magnitude.”

Twyford said he was not opposed to using foreign companies for any housing contracts, but believed the only thing holding Kiwi suppliers back was a lack of scale that the rumoured deal would provide.

“This is precisely the kind of opportunity the government has to grow a better and more competitive industry.”

Pamela Bell, the chief executive of industry organisation Prefab NZ, had also heard rumours of a potential deal between Housing NZ and Fast House and said her organisation had been advocating for the abilities of local businesses.

“In New Zealand there is inherent capacity and capability - some of it is visible and some of it is not visible.”

Bell said Housing NZ was “making all the right moves” in expanding its use of innovative designs like prefabricated housing, but it was important to focus on local economic development.

“We really need to try and look at this all holistically and with a longer term vision for growing our skills development and regional development; those things are really important for our construction industry to morph and change and become more valuable to New Zealand.”

John Arnold, a New Zealand-based sales agent for Fast House, told Newsroom the company was “close to finalising” a deal with Housing NZ.

However, Arnold said he could not comment about any discussions without Housing NZ’s approval.

A Housing NZ spokeswoman refused to answer questions about the organisation’s discussions with Fast House, but said it had “signalled to our industry partners” that it was moving away from a project-by-project contracting model to multi-year deals.

“When Housing NZ is ready to establish multi-year supply arrangements, we will be required to run an open market process to appoint parties, regardless of whether they are domestic or offshore.”

The spokeswoman said Fast House was not a current member of its open panel of prefabricated and modular housing providers, which were chosen on a project-by-project basis.

UPDATE: Housing NZ has provided a further response to Newsroom regarding its plans for prefabricated housing.

In a written statement, a spokeswoman said: "There is no truth to the speculation you’ve reported that we’re about to sign a deal with any company, local or offshore, for thousands of panellised houses. As I outlined in one of my two responses to you, Housing New Zealand is some time away from moving to multi-year contracts for construction materials or building. Housing New Zealand will follow its normal competitive tendering processes when it’s ready to move to multi-year contracts."

(This story was updated at 10.18am with a further response from Housing NZ.)