Govt agencies to share space in savings blitz

HANK SCHOUTEN
PROPERTY REPORTER
Last updated 10:40 21/07/2012
David White
FAIRFAX NZ
ON THE MOVE: David White is co-ordinating the project to rehouse more than 5000 Wellington public servants.

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Government agencies on the hunt for new Wellington offices are being bundled together in a request for proposals to provide between 50,000 to 60,000 square metres of space to rehouse four departments.

The request for proposals, published on the Government electronic tender service this week, is to provide space for more than 5000 staff who work for the Social Development and Health ministries, the newly-formed Business Innovation and Employment Ministry and the Crown Law Office.

The Wellington office accommodation project is being run by the recently-established Government Property Management Centre of Expertise, which is on a mission to save as much as $72 million from the annual bill for housing public servants.

Its involvement is a major change from the system where departments organised their own accommodation.

It also signals a reversal of the recent trend for departments to get their own purpose-built high-specification, A-grade, five-star green-rated office blocks where annual rents run to $500 per square metre or more. These were justified on the grounds that it saved money to have staff together in modern, efficient, large-floorplate buildings.

But a glut of old office space in the heart of Wellington has raised the possibility that departments could be housed much more cheaply in refurbished buildings.

And further savings are being sought by cramming more staff into less space and encouraging departments to share facilities and services.

The Social Development Ministry's drawn-out quest for a new head office was the first to be knocked back by Cabinet earlier this year when it was told its preferred option was not affordable.

The new request for proposals has also forced a holdup in the Health Ministry's project to secure new Wellington offices.

The Health Ministry went to the market last year, asking developers for proposals to provide it with 15,000sq m of A-grade space. More than 20 proposals were received when the deadline expired in May.

But these will now have to be resubmitted for inclusion in the much larger multi-agency accommodation project.

Social Development Ministry deputy chief executive Marc Warner said a factor in the decision to combine the various projects was the recent combination of four departments into the Business Innovation and Employment Ministry.

It made sense for all the departments to do things together.

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He expected the office requirement could be met by a number of building owners. And it was likely that the departments may now have to move into refurbished rather than new buildings.

"New builds might come into the mix but if it is more expensive we would have to justify the marginal cost over existing refurbished buildings.

"There are options about how we use space better and we probably don't need as much space as we have currently."

They were looking at precisely how much space each agency needed - the figures were still being finalised and there were variables.

David White, director of the Government Property Management Centre of Expertise, said agencies were looking at how much space they needed in the centre of Wellington and whether some staff could be located in the Hutt Valley or Porirua.

It was also possible departments could be co-located so they could share libraries and meeting rooms.

Some public servants may also have to settle for buildings that are not up to the highest earthquake standard.

White said buildings would have to meet health and safety standards but all the buildings would not necessarily have to be 100 per cent of the new building standard.

"The stronger and safer a building, the better it's going to be regarded. It's a subjective area and we haven't specified a code - we want to see what the market comes back with."

It was also not stipulating A-grade space.

"It needs to be an appropriate standard - government agencies don't need to be in A-grade space," said White.

A key focus was on quality of services and efficient working environments which added value.

Warner said investing in commercial property space could be expensive and agencies need to take advantage of any opportunity that can help achieve the best possible outcome.

It made sense to combine the requirements of the four departments in this request for proposals.

"By bringing the needs of these four agencies together . . . we'll be able to reduce procurement costs and source quality buildings at a more competitive price than if agencies worked alone.

"It's important that agencies get their search right. We're not just looking for a roof over employees' heads, we're looking at buildings that will ensure maximum productivity, safety and help support staff retention.

"The current request for proposal is specifically looking for proposals which can provide all or part of the 50-60,000sqm office space required. This space will be required between 2014 and 2017," said Warner.

All submissions would be carefully considered and more detailed negotiations held with property owners who best meet the requirements.

Submissions close on August 10.

Contact Hank SChouten
Property reporter
Email: hank.schouten@dompost.co.nz

- © Fairfax NZ News

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