Iron ore prices rose 40% in December driven by demand for steel from China, which is embarking on a major infrastructure programme.
NZ Fencing Contractors Association director Shane Beets says wire manufacturers have already notified customers of an increase in wire prices.
Asked what this means to the Government’s riparian fencing project, Beets suspects fencers will be seeking meetings with the Government to discuss their contracts.
The Ministry for the Environment (MfE) has awarded 24 contracts for 1631km of fencing at a cost of $67 million under its Jobs for Nature programme’s Public Waterways and Ecosystem Restoration Fund.
It has a further 19 contracts worth $36m pending under the programme’s Freshwater Improvement Fund.
An MfE spokesperson says high costs could impact, but there are processes to vary contracts for the impact of cost increases.
“If costs increase over the life of the project, there are processes for varying the contract to modify outputs and reprioritise objectives outlined in the contract,” they said.
The spokesperson says the issue of rising costs has not been raised so far.
“Increased fencing costs could result in some outputs within projects, not necessarily fencing outputs, to be reduced but this has not been raised as an issue to date.”
