40 jobs to go as contractor closes

Dunedin's Delta Utility Services intends to close its Christchurch civil construction contracting business, with up to 40 job losses, after failing to sell the unit.

This year, Delta said it hoped for much buyer interest, given the earthquake repair environment.

Yesterday, it said it was disappointed that despite the staff expertise in the unit, a sale was not made.

Chief executive Grady Cameron said the proposal to close had resulted from a strategic review as Delta focused on long-term service provision with stable returns.

The unit had insufficient "future" workload to maintain a depot, although revenues had been healthy. This lack of work would have worried potential buyers, he said.

In March, Delta started a sale process for the business as a going concern for companies looking to build their capacity or expand into the rebuild market.

The Christchurch civil construction business had revenues of $10.4 million in the June 2012 year and plant and other assets valued at more than $4m. Revenues in the June 2013 year were similar, Cameron said.

Some alliance members of the quake rebuild-related Stronger Christchurch Infrastructure Rebuild Team (Scirt) were likely to have looked at it.

Scirt is working on the $2.3 billion repair of Christchurch's horizontal infrastructure, including roads and underground water and wastewater systems.

Cameron said it was disappointing that despite strong initial interest from a range of companies, no credible offers had been made to buy the business unit.

Delta had expected there would be significant interest from potential buyers in a team with a "solid reputation" for its work.

The outcome was no reflection on the team, which should be sought after in the rebuild environment, Cameron said.

In the absence of a buyer, Delta believed it had no viable alternative other than to close the business and leave the Christchurch rebuild market.

It had started a consultation process with affected employees. It expected to make a final decision once that process had ended on June 19.

Staff would work until then and perhaps beyond, with a closure likely three to four weeks after that. Redundancies would be paid, and some assets could be sold, he said.

The Press