By David Winning
SYDNEY–Fletcher Building said it would make another large provision on construction of the New Zealand International Convention Center after costs to complete the project rose by more than expected.
Fletcher said the additional provision of 165 million New Zealand dollars (US$100 million) would be classified as a one-off item in its accounts for the first half of the 2024 fiscal year.
Fletcher said steel remediation, internal fit-out, and installation of operating systems have become more costly since its last update.
“The increased costs are primarily due to higher levels of subcontractor resource required to deliver the final stage of the project,” Fletcher said on Monday. “In addition, a portion of the company’s claims against the project Contract Works Insurance may not be recoverable.”
Fletcher agreed to build the NZICC, the 5-star, 300-room Hobson Street hotel and the retail laneway linking Nelson and Hobson streets in Auckland in late 2015. Completion of the project is on track to be achieved by the end of this year.
Also, Fletcher said it would make a NZ$15 million provision on the WIAL Carpark after assessing the cost of remediation work.
“We remain on track to complete construction of all legacy projects by the end of calendar 2024, however cost and revenue risk will remain until we have done so,” Chief Executive Ross Taylor said. “We will vigorously pursue our claims for recoveries on the legacy projects, which are likely to take until FY 2025-2026 to settle.”
Write to David Winning at [email protected]
Read the full article here
