Infrastructure specialist Delta has proposed to phase its civil construction business out of Southland and Central Otago, which could result in the loss of 36 jobs.
Delta is a diversified infrastructure specialist providing asset management, energy and environmental services.
Delta chief executive Grady Cameron said yesterday the business intended to phase itself out to avoid losses and to reduce its risk profile in line with the requirements of its shareholder, Dunedin City Holdings, to generate stable cash flows.
Mr Cameron said the proposal to exit Delta's entire civil construction contracting business would mean a reduction of about 20 jobs in Central Otago, 16 in Southland and 41 in Dunedin out of a total Delta workforce of about 580.
The company was faced with a situation where it lacked long-term maintenance contracts to underpin construction project work and enable it to be competitive against larger national and multinational companies.
"The reality is central and local government expenditure on civil construction outside of Auckland and Christchurch is set to reduce over the next thee years and there is a lack of developer-driven projects in Otago and Southland."
In the face of continuing weak demand and a lack of long-term contracts there was insufficient current and future workloads to maintain its existing workforce and depot bases, he said.
"We never take decisions affecting our people lightly. We have made considerable, ongoing efforts over the past year to turn around loss-making civil construction operations including a management restructure."
The proposal follows the closure of Delta's civil construction contracting business in Christchurch last month.
The company expected to make a final decision on July 12.
If the proposal went ahead it was expected the Central Otago water and civil business unit would close on September 30 and the Southland water and civil business unit would close in January next year.
- The Southland Times