Fletcher Score Big AMETI COntract


Fletcher Construction has won the Auckland Transport contract for one of Auckland’s biggest transport construction jobs, a $180 million project to start dealing with traffic congestion in the eastern suburbs.

Construction of phase one of the Auckland Manukau Eastern Transport Initiative (AMETI) Panmure project has been awarded to Fletcher. That contract is worth $100m.

Starting in January and continuing until 2014, it will be Auckland Transport’s largest construction project and includes:

  • A new bridge built on Ellerslie Panmure Highway for a future busway and the existing bridge replaced. The process for managing traffic while the bridges are built will follow the successful model followed at Newmarket Viaduct, with traffic moved to new bridges as they are built. The bridges will be higher and longer to allow for electrification, a new road and a possible future third rail line.
  • A 1.5km new road linking Morrin Rd to Mt Wellington Highway and a 220m tunnel for the new road built next to the rail line at Panmure Station. This will be created by building a box with a new road on top for buses and taxis to stop at the station.
  • A major upgrade of Panmure Station to create an interchange that allows easy transfers between trains and buses improvements for pedestrians and cyclists and space for future town centre development.

The 1.5km new road is necessary to reduce traffic flows through the Panmure roundabout and provide a better route for freight/business traffic. This will also provide benefits for the Panmure community. When complete in 2014 the new road will take some pressure off the roundabout to allow work on phase two of AMETI Panmure - construction of a new signalised intersection where the roundabout currently is and a urban busway to Pakuranga.

Work is already underway on replacing the Mountain Rd Bridge near Panmure Station and realigning part of the road. The old bridge over the rail line will be demolished on Boxing Day for construction to begin on the new bridge.

Fletcher's David Fehl & John Palm with AT Major Projects Manager Rick Walden at the site of phase one of the AMETI Panmure project.

Auckland Transport Major Projects Manager Rick Walden says this is a significant step forward in the long term plan to sort out the transport issues in the area. People can expect to see major construction work focused in the Panmure Station area during the next two years.

“For example, over the rail lines on Ellerslie Panmure Highway there will be a complex job to build new bridges. A new bridge will be built next to the station for the future busway then traffic moved on to it so the old bridge can be demolished.”

“The benefits of this hugely important project will be felt not just locally for those in Auckland’s rapidly growing eastern suburbs, but throughout the region and New Zealand as a whole,” he says.




  1. damage says:

    I hope the $6 million dollar premium for Fletchers to do the work is worth the tax payers money

  2. Ingolfson says:

    What $6million premium? I assume you are saying that another competitor priced at $174 million?

    If so, that is still reasonably close in my view - and I don’t think going for the lowest bidder is a successful long-term strategy anyway. It only encourages cost-cutting until you get serious work deficiencies.

    Of course deficiencies are not solely caused by cut-throat pricing. But there is a causal link.

  3. damage says:

    The lowest price received by the council was $96 million with Fletchers price in at around $102 million.

    The inital bid process required all contractors to be pre qualified on the basis that they could do the work. It would therefore seem logical that the lowest price should won the contract if all the tenders they received were from pre qualified contractors.

  4. Abdul Rahman Ahmed says:

    I can not see why they have awarded the contract to the contractor who is 6 mil higher than the other one…all these companies know what they are doing and surly the lowest bid contractor will be able of meet the contract requirements and dates…why wasting 6 millions of the tax payer money…Media should investigate .

  5. Ingolfson says:

    Not necessarily - there obviously were still reasonable differences in the bid, unless you are alleging a crooked deal.

    Pre-qualification doesn’t mean everyone who qualified is the same, nor does it mean that low prices can’t still drive down quality in the longer run. Though I guess a pre-qualification process will remove some of the cowboys and those who have already run down their company too much by bidding too low for other jobs.

    @Abdul Rahman Ahmed

    Soooo ready to see fraud, you guys. For your information, Council tenders are usually weighted. For example, a tender might be 50% price, 25% proven experience, 25% proposed construction methodology. This all gets put into numbers by the evaluating team and the contract given to the one who scored highest. That’s at least in simple terms how it works.

    If a company scores very highly on the two later factors above, and scores a bit worse (costs more) than the lowest bidder, then it will (and should) get the job.

    Otherwise our construction industry would be in a contant race to the bottom (seen in many other countries) to see who could wring the last cent out of their workers, could best force their suppliers to drop their prices (favouring the big guys even more), could do the job as quickly and as cheapo possible (and DAMN the quality, as long as the minimum required is achieved).

    No thanks - a tendering process that doesn’t ONLY go by price is much better.

  6. Matt L says:

    They most likely would have used the two envelope system which judges a tender on both quality and price. The idea is to get the best overall result long term.

    This NZTA board paper on using it for Waterview gives a good explanation on it

  7. damage says:

    The point is that, all of the Contractors that qualified had the capability to do the work otherwise they would not have qualfied in the first place. Thus the cowboys were removed.

    The weighting system for this particular job was 40% price 60% attribute.

    In this case, the lowest price conforming method would have worked.

    Ingolfson - your comment about driving the lowest cent of the workers will happen regardless of price provided its not a suicide bid.

  8. Matt L says:

    Damage - you sound like you work for one of the bidders that lost and are unhappy about it.

    You say yourself that 60% of the weighting system is based on the attributes so most likely the techniques, materials and design that Flecthers proposed to use are worth the extra $6m over the other bids

  9. damage says:

    No Matt - I just think $6million could be better used elsewhere.

    The design and method were specificed , so cant really see where the premium is..

  10. Ingolfson says:

    “your comment about driving the lowest cent of the workers will happen regardless”

    That’s exactly the attitude that I am talking about - you seem to consider it “normal” that employers should always deal with their workers as if the company’s life depended on whether the workers take the lowest negotiable wages, benefits and the longest hours.

    So tell me - which company is more ABLE to pay their workers fair wages? The one that succeeded with a lower bid, or the one that succeeded with a higher bid? Who is more likely to be ABLE to pay a living wage for everyone, and a premium to retain skilled workers?

    I am not saying that a company making more money from a job will necessarily pass that on to their staff. That’s the sad reality of capitalism. But the company just scraping by will not even be able to contemplate doing so.

    It works the same way sweatshop countries displace the workers from countries that provide unemployment benefits and and health insurance. Race to the bottom. I think it is great that at least some government agencies don’t participate in that race whole-heartedly, but realise that there’s more than just price.

  11. Evan J says:

    Do we know who the unsuccessful bidders were? Without that knowledge we cant really comment on what they would have, or wouldnt have paid their employees. What the subbies pay their employees is another matter. With Fletchers the council has chosen a company with a proven track record of delivering a quality job on time and on budget.

  12. damage says:

    I agree with your idealism, but just because one company’s price is higher does not mean they are making more money. The likes of Fletchers have huge over heads and that is probably where the difference is.
    The guy on the ground will still get the same money regadless of who he is working for.

    As far as I am aware the companies are

    Fulton Hogan
    Downer / Heb
    McConnel Dowel

  13. Joshua says:

    Fletcher has the best record in recent times for going under time, safety and environmentally and on or under budget. Giving the job to them is worth the price difference, the next company on that list, who are in the ball park would be Fulton Hogan and then Hawkins or McConnel Dowel.

    Remember that the lowest bidder at the start may not always end up as the lowest price either, quite often have we gone for the lowest price option only to have a list of variations that dramatically increase the costs, which is why the construction methodology is so important when figuring out the best overall tender.

  14. Norris Murray says:

    If what “ Damage “ mentioned about the companies who bid the job is true then the 6 million extra that went to Fletcher and will come from the tax payer money is absolutely wasted. All these companies have long history of delivering big projects on time and within the budget so why Fletcher is deferent. In regards to what “ Joshua “ mentioned about the variations cost and the methodology I totally disagree with him as these jobs will run according to the contract conditions under experienced engineer to the contract so variations will not be approved just because the contractor will ask for them.
    I fully agree with Damage and the 6 million extra cold have been spent in another project. It all comes from the taxpayer money and this discussion should be investigated .

  15. Joshua says:

    Norris - I was talking about the recent period Fletcher’s have proven themselves more successful than the opposition companies, nothing against FH, Hawkins, Downer and McConnel Dowel, but Fletcher has had a good run on projects of late.

  16. Ingolfson says:

    Norris & Damage - so far you really have… well, nothing but talk. Neither do I have more, but I am not trying to claim that this deal is cooky.

  17. Evan J says:

    In my opinion, one of the assets that Fletcher has going for it is its core of key staff, both indoors and outdoors, who have been able to move seamlessly between the big Auckland projects the company has been involved with - Mangere bridge, New Lynn rail trench, Victoria Park tunnel and Maioro Street interchange, because the projects have followed or run alongside each other. And the continuation of those projects has also meant the staff of the key subbies such as Warren Fowler, Brian Perry and Higgins have also been kept gainfully employed. Those staff members would be one of the reasons that Fletchers has become so successful, and has been awarded contracts even though it has not been the lowest tenderer.

  18. Evan J - Agreed.

    Brian Perry is a division of Fletcher’s.

  19. damage says:

    Fletchers were not the cheapest, in fact Hawkins I have just found out came in at about $93 million.
    Fletchers won on their attributes which is fair enough as they have a great track record, but equally if the companies can pre qualify to tender then in my opinion it should be based on lowest price conforming and in which case Hawkins would have won.

  20. Matt L says:

    Damage - if you read the NZTA paper that I linked to above you will see that even though multiple companies will pre qualify they will have different methodologies which can have a big impact on the outcome of the project i.e. one company may use a material that is cheaper to build but that costs more to maintain. We really want to get the best long term solution.

    Taking a long term approach will save us more money future and examples of it are part of the reason for some of these changes. The reason we are getting electric trains was that over a 30 year period it was cheaper than just buying new diesel trains, even with the infrastructure costs added in. Same reason why we are now getting 57 EMU’s instead of 38 with some electric locomotives to haul the existing carriages because long term it worked out cheaper even though there was more upfront costs.

  21. damage says:


    The materials have already been specified by the design team. This contract is not a d&b and therefore whole of life costs are not cosidered in evaluating these tenders


  22. Norris Murray says:

    Damag ..Hawkins has done New Market Station and the Auckland Electrification for KIWIRAIL . Also Fulton Hogan are doing the North Gate Alliance “ NGA “ with Leighton . and the list for the big projects that have been successfully executed by these companies is long…these companies are more than capable of doing this project and meet the dead line like they did with the other projects before …so whey the tax payer pay another 6 million extra and I do not see how this contract will be cheaper for the tax payer money if it hass started with extra 6 millions

  23. damage says:


    Hawkins have no real track record with roads but I hear what you are saying. Its a shame that the tax payer has to shell out another $10million just so Fletchers can do the work.

  24. backhander says:

    f the clients engineers estimate is taken as the baseline then on the 40/60 scoring, then $130m equals 40points = 1 point equals $3.25m. It only takes a 3 point ‘Non priced attributes’ score swing to account for the near $10m. It gives the clients engineer (Beca) some leeway to justify their selection, in my opinion.

    However, ‘damage’ appears to think there wasn’t $10m worth of innovation at this stage that would justify the points difference, given the tight ‘prescriptive’ nature of the tender docs.

    Such value placed on a Non Priced point, may just emphasize that the weighting was ill considered.

    Certainly a 30/70 would have been worse, that would merely give any client a thin veil to hide behind, one from which to show they have gone through a process, but retained the ability to select who they wanted by gentle massage of the ‘Non priced attributes’. It allows personal opinion to have an impact on the final outcome, which cannot be good for competition, the tax payer, anyone? But does 40/60 go far enough to fully eradicate potential for this happening again in future. I guess that will always be a hot topic that requires lively debate.


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