How Hawkins won giant $800m new Auckland Airport terminal contract

Reminder, this is a Premium article and requires a subscription to read.
Signing the $800 million contract for one of New Zealand’s largest builders to construct Auckland Airport’s new domestic jet terminal was no grand ceremonial event, with key people gathered in one room.
Murray Robertson, transport and infrastructure chief operating officer for Australia and New Zealand for Downer, which owns Hawkins, told how he went online to sign the deal last week.
“I did it digitally,” the Kiwi said of Friday’s signing.
He described the project as New Zealand’s biggest private infrastructure project and a huge boost to the sector.
Yesterday, Australian-headquartered Downer EDI said its wholly-owned subsidiary Hawkins had been awarded a contract valued at about $800m to do the new domestic jet terminal building works.
Separately, the airport company told the NZX: “Auckland Airport enters into contract with Hawkins to manage the construction and delivery of a new domestic jet terminal building, the major structure in Auckland’s terminal integration programme.”
That integration programme would be an “economic engine”, creating 2500 jobs at peak and supporting many thousands more, particularly in South Auckland.
Chief executive Carrie Hurihanganui said the building would be beside the airfield, integrated baggage systems and associated facilities that comprise the planned $2.2 billion domestic jet terminal project.
That would provide the essential resilience and capacity needed to support the economy and future of travel, she said.
“Auckland Airport has a long-standing relationship with Hawkins – one of New Zealand’s largest construction companies. We know they have the track record and expertise to successfully deliver such an important aviation asset for New Zealand,” Hurihanganui said.
The airport company also announced a $1.4b capital raise to fund its $6.6b multi-year development plan, including that $2.2b domestic terminal upgrade.
Robertson is based partly at Hawkins’ new offices at 1 O’Rorke Rd, Penrose after it left Parnell.
He told of more than two years of prior engagement with the airport, the two parties nutting out precisely how the 78,000sq m structure would be built.
Downer’s notice to the ASX and NZX yesterday explained that.
“Hawkins has been working collaboratively with Auckland Airport in an early contractor involvement [ECI] phase since February 2022 and is also currently on site delivering an enabling work package for the domestic jet terminal under a separate contract,” that said.
Robertson said today: “That phase helped formulate how the contract would be completed. That helped the airport best position and frame up how they want to deliver it, getting input from us. The value of the ECI is it allows the client to take input in terms of constructability and the practical way of delivering things so they get best bang for buck.”
But it wasn’t just the past two years that were key to the deal.
“We’ve been working with the airport for around 40 years and have a long-standing relationship. This has been a project that is pivotal to the airport and is a turning point for all of Auckland, connecting the domestic and international terminals.”
Craig Trellor, Hawkins’ executive general manager and Terry Buchan, Hawkins’ northern general manager, had also worked closely on the $800m airport contract, Robertson said.
In 2016, Hawkins built Pier B, one of the piers that the planes pull into at the international terminal gateway to the far or Manukau Heads end.
Hawkins announced when it won that project: “The $25.5m Pier B project is the first airport pier that has been specifically designed to accommodate the new generation of giant passenger aircraft, such as the Airbus A380. The building, including links to other parts of the main terminal building, covers roughly 5500sq m and is 145m long, 18m wide.”
Downer said yesterday work on the new $800m project would start this month and was scheduled to be completed by 2029.
Robertson said: “Hundreds of Hawkins staff will work on this. But with subcontractors and suppliers, you’re looking at upwards of 1000 people.”
He is confident subcontractors and staff will be readily available, not because of the economic downturn and less work being available “but because it’s a priority project and an important one for New Zealand subcontractors and our team. People really want to work at the airport so it will attract good people”.
Asked what winning the $800m contract meant for Hawkins, he said: “It’s a pivotal project but we’ve had some very strong projects in the Auckland region. This supports our regional delivery, with the likes of schools and civic buildings nationally. That focus won’t drop but we do recognise a project of this scale provides a real opportunity to put our commitment to leadership and governance. This has to be delivered very well, in collaboration with the New Zealand subcontractors.”
Hawkins and the airport work with the Ara Education Charitable Trust in South Auckland.
Robertson said others engaged to work on the new terminal included consultants Mott McDonald and architects Jasmax and Grimshaw.
The really positive story was that the project would be built by New Zealand contractors, he said.
Asked about Hawkins being owned by listed Australian business Downer, he said: “Hawkins started in Hamilton. It’s run by a Kiwi. I’m a Kiwi. All our subbies are New Zealand-based.”
Downer bought Hawkins for $60.6m from Auckland’s McConnell family in 2017. David McConnell has not worked there since but his sister Nancy McConnell has been a strategic adviser “and remains closely connected to our people”.
Many New Zealand-made materials would be used in the airport’s new building.
“One of the structural steel packages has been let to a New Zealand fabricator but more will be let over time,” Robertson said.
Working in a live environment would be a challenge “but work will be delivered in a cordoned-off area. There will be a big focus on safety and management of materials and people coming in and out of the site. We do recognise how important the site is. The ongoing operations of the airport have to come first and foremost”.
Downer New Zealand’s annual report to June 30, 2023 showed it generated revenue via Hawkins and others subsidiaries here of $2.3b, up on the $1.8b the previous year.
But expenses rose from $1.8b to $2.3b – one of the reasons its profit dropped from $37.5m to $18.6m.
Auckland Airport shares are in a trading halt till tomorrow, due to the capital raise.
They were trading around $7.54, giving a market cap of $11.1b.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.

Reminder, this is a Premium article and requires a subscription to read.