The Dunedin City Council has awarded a major new contract for the maintenance of its drinking water, wastewater, and stormwater networks to construction giant Fulton Hogan, in a deal worth approximately $35 million a year.
The agreement, which begins on 1 July 2024, consolidates several previous contracts into one comprehensive city-wide programme. The initial term is set for five years, with an option to extend it for two further two-year periods, potentially securing the partnership for a total of nine years.
The move is designed to create certainty for the council and residents, ensuring a single point of accountability for the essential services that manage the city's water infrastructure. This includes everything from planned maintenance and inspections to renewal programmes and reactive repairs for the vast network of pipes and facilities across Dunedin.
The decision to bundle the services follows what the council describes as a 'robust procurement process' aimed at finding a partner capable of delivering consistent and high-quality outcomes for the community.
A single point of contact
Previously, maintenance work for the three different water systems was handled through separate agreements. By streamlining these into a single contract, the council aims to enhance efficiency, improve coordination, and simplify management of the city's critical infrastructure.
Dunedin City Council 3 Waters Group Manager John McAndrew says having one contractor will bring a number of benefits for the city. It establishes a clear line of communication and responsibility, which is expected to lead to better service levels for residents, including faster and more coordinated responses to issues like water main breaks or blockages.
The 3 Waters portfolio represents one of the most significant areas of council operations, managing the delivery of safe drinking water, the treatment of wastewater, and the management of stormwater to prevent flooding and protect the environment. The performance of these systems is under constant scrutiny, particularly amid ongoing national conversations about water infrastructure standards and management across New Zealand.
Local roots secure major deal
The contract award is a significant win for Fulton Hogan, a company with deep roots in Dunedin. The firm was founded in the city in 1933 by Julius Fulton and Robert Hogan and has since grown into one of New Zealand's largest civil contracting companies, with major operations in Australia and the Pacific.
Securing a long-term, high-value contract in its home city underscores the company's continued local presence and importance as a major employer in the Otago region. Mr McAndrew noted the value of retaining the institutional knowledge held by Fulton Hogan's local staff, who have been involved in maintaining parts of the city’s water network for years. The nearly $35 million annual value of the contract represents a stable and significant investment in the local economy. It provides job security for hundreds of local employees and supports a network of local suppliers and subcontractors. This stability is a welcome anchor in a varied local business landscape, which currently sees dozens of businesses, from motels to retail stores, listed for sale across the city. In a similar situation, the Tacoma council approves tax break for Hilltop townhomes
The new contract is one of several large-scale infrastructure and planning initiatives underway in Dunedin, including the Otago Regional Council's move to a new headquarters and the University of Otago's ambitious campus master plan, all of which contribute to the city's ongoing development.
Future-proofing Dunedin's water network
For Dunedin residents, the practical implications of the new contract will be measured in the reliability and responsiveness of their water services. The emphasis on planned maintenance and renewals aims to proactively address issues within the network before they become critical failures, reducing the likelihood of service disruptions and emergency repairs.
This long-term approach aligns with broader goals of future-proofing the city's infrastructure against the challenges of an ageing network and a changing climate. According to the Dunedin City Council, the 3 Waters network includes over 1,400 kilometres of drinking water pipes and a similar length of wastewater pipes.
The nine-year potential timeframe of the contract allows for long-range planning and investment in new technologies and methods for maintaining this complex system. Mr McAndrew says council staff are looking forward to building a strong working relationship with the Fulton Hogan team as they begin the new contract next month.
