Mr. Frank Curran:

It is difficult. Talking to any builder, they will say that materials' price inflation is a real issue. The cost of timber, rebar and ceramics has gone up. It is running anywhere between 15% and 30% up on the last year or two. The supply of labour is difficult. It is expensive. Building in city areas is particularly expensive in terms of access to sites and getting people in to work there. It is a real issue. Going back maybe two years ago, we were getting very few tenders back. Builders were afraid of committing to fixed-price contracts. There has been some movement around that now because we can look at construction inflation and provide some compensation for that through variable price contracts and so on. That has helped but there was a stage when they were very fearful of committing because it is a high-risk business. Now at least people are tendering.

Regarding value for money, it is a competitive tender process. What we get in is the value of the work and there is very little we can do about it. On the spec, we have to build to building regulations. We have to build to an A rating and the NZEB so we are kind of tied with those. To reduce the spec we have to look at the likes of kitchens and stuff like that, which saves very little money. It is a difficult process.