Supply issues affecting council projects

Thursday, 10 March 2022

Southland District deputy mayor Ebel Kremer says supplies are more difficult to obtain which has an impact on a lot of the council’s projects.

The Southland District Council may have to reconsider some of its planned projects because of supply issues and escalating material costs.

And the Gore District Council’s library development has been delayed by three months because of problems sourcing materials. The library will now be completed in January.

Given the supply issues were happening during a building boom it was a “perfect storm”, Gore council chief executive Steve Parry said.

At a Southland District Council committee meeting this week, senior staffer Brendan Gray said its number-one risk was Covid-19 related supply issues which would almost certainly impact on some projects.

He cited a company which did the council’s toilet renewals, which had two thirds of its staff off work with the virus, saying it could potentially impact on the council’s delivery programme.

“Covid and the impacts, both on materials and labour, is something that’s evolving all the time,” he said.

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“We are extending lead times and extending material supply time frames to try and be accurate with our forecasting for our programmes.”

Deputy mayor Ebel Kremer suggested the issue would also have a significant impact on the council’s finances. The longer the delays the more expensive the products would be, given the escalating cost of materials, he said.

He asked staff to give councillors an understanding of the financial implications the pandemic was having on the council’s ability to deliver, saying it may need to reconsider some projects.

A report to councillors at the meeting said major suppliers were tightening control of supplies on certain materials.

And freight delays on Cook Strait ferries were continuing to impact on the delivery of goods, with project time frames extending as a result.

After the meeting, Kremer said the issue would be monitored, but it was too early to say what projects may be affected.

Some of the smaller projects may need to be deferred due to supply issues and others brought forward where supplies had been secured.

“It is a concern, but that’s the reality. Supplies are more difficult to obtain which has an impact on a lot of projects we have got going. It’s the environment we are in and we have to adjust and adapt accordingly.”

The council’s roading programme remained on track due to the materials being sourced locally, and the council's bridge work was not in jeopardy, Kremer said.

Invercargill City Council senior staffer Erin Moogan said its current projects were not experiencing significant supply issues or cost impacts.

“We are keeping a close eye on the markets as we start into our next tranche of projects.”