Airport construction project back on track

Less than three weeks after construction on the Hawke’s Bay’s Airport expansion halted when Arrow International went into voluntary administration, the project is back up and running.

Some early warning signs enabled the board of Hawke’s Bay Airport to identify the collapse of Arrow as an emerging risk.

Arrow collapsed in late February, after 35 years in business, when it ran out of cashflow after a contractual disagreement went to court.

‘‘We all hoped it would never happen, but . . . we got some legal advice and we were almost prepared with a contingency plan,’’ airport chief executive Stuart Ainsley said.

That was in mid-January, more than a month before Arrow collapsed. Fortunately, by the time of the collapse the first stages of the building were complete.

One of the first things airport management did was start talking to the administrator, who helped transfer the project over to the airport as smoothly as possible, Ainsley said. Part of the contingency plan was to secure the existing Arrow project managers and subcontractors on site.

‘‘Retaining those core people was important. We could have looked at . . . reletting the contract but we were actually pretty satisfied with the cost to complete the job that the administrators said they’d landed at.’’

Part of the contingency plan was to set up a subsidiary which was the vehicle to allow the $20.2 million project to keep moving forward.

The financial risk was mitigated in part by the release of a bond which enabled the airport to land softly after Arrow’s collapse. Two or more months and 10 to 20 per cent of additional costs could have been added to the project if it had been put out for tender again, Ainsley said.

The expansion of the airport terminal is due to be complete in August 2020.