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March 11, 2013 | by  | in News | [ssba]

University Finds New Bob the Builder

Can they fix it? Yes, but not just yet.

The University has secured a main contractor to complete work left over following construction giant Mainzeal’s receivership, but it is likely to still be many months until students can enjoy a fully completed kelburn Campus. Work on the three year, multi-million dollar
project came to a halt following the receivership announcement on February 6. Director of Campus Services Jenny Bentley confirmed last week that the University has secured a new main contractor following weeks of negotiations in the wake of the receivership. “The University has appointed a new main contractor, LT McGuinness, to take over the construction work. This is a company that has undertaken a number of projects for us in the past and we are working through a revised programme with them.”

Under the revised programme, work that was originally due to be completed at the end of April—including refurbishment of areas of the
library and completion of the Courtyard—will now commence early next month. Subcontractors spoken to by Salient, who were involved with the Campus hub project prior to receivership, predict that the scope of this outstanding work is substantial. “There was three months worth of work that I know of before [the receivership], so there’s definitely three months worth of work to pick up there… That was just in the handover of the hub; there’s probably more in the Rankine Brown and so forth.

“There could be six to eight months worth of construction work up there. It’s not weeks, put it that way, it’s months of work left up there.”
Despite these ongoing delays to a final completion date, Bentley notes that progress is still being made. “We have made substantial progress in the past two weeks, with the Tim Beaglehole Courtyard (formerly known as the Quad) and the reading room opening last week. We also expect the new sushi bar (MakiMono) to open in early April.”

The subcontractors Salient spoke to said progress on the Campus hub following receivership has been a lot slower than on other
projects that had been under Mainzeal’s control. “Things have moved on other [Mainzeal] projects quicker than they have [at victoria]. [On the other projects] they’re still a way from anything being agreed yet; they’re probably another good month away, but an offer has been made on the basis of moving forward, which we haven’t had at all from [Victoria].”

Subcontractors working at Victoria are amongst thousands around the country who are owed millions of dollars in retention payments lost when Mainzeal went under. A common feature of construction contracts, retention payments generally amount to five to ten per cent of the total value of the contract, and are withheld until a job has been completed and approved. This money is ‘retained’ by both the owner of the contract over the main contractor, and by the main contractor over its subcontractors. “The biggest loss for us and maybe others is the retention money that they take off you each month when you’re working on these projects. Mainzeal basically use that money to run their business. If they collapse, it’s gone.”

In addition to these lost retention payments, subcontractors will face further losses if their partially-completed contracts are not continued under the new main contractor. In the period between the receivership announcement and finding a new main contractor, work has been carried out by a small number of subcontractors working under interim arrangements with the University.
One subcontractor, who had completed their work before the receivership announcement, explained that a number of subcontractors were likely to be reluctant to go back to the site given the amount of money they had lost through the project. “There’s only about two or three contractors that have gone back to the site, out of about thirty.”

For others, the receivership represents an opportunity for work during what has been a tough period for the construction sector. “If you haven’t lost anything it’s more of an opportunity to get more business… It has got a positive spin-off for some people because if the current subcontractors that are there don’t go back there’s opportunities for others.”
The hub will be officially opened by Governor-General Lt Gen Rt Hon Jerry Mateparae on March 21.


Molly McCarthy


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