Christchurch project overruns

At least two Christchurch projects have contributed to Fletcher Construction’s financial woes.

The company incurred heavy penalty payments for delays to the city’s $300 million Justice and Emergency Services Precinct, and the new Novotel hotel being built for Christchurch International Airport Ltd (CIAL) is also on the list of problem projects.

The 200-room hotel beside the international terminal was due for completion last December.

CIAL is still awaiting a confirmed completion date but said the hotel management company was accepting bookings from September.

Delays resulted from the wrong grade of steel being delivered for bracing, and supplier Challenge Steel later went into voluntary liquidation.

CIAL said that it did not expect to be financially impacted by the belated opening and Fletcher has declined to answer any questions about any exposure related to delays.

Fletcher Construction is also the main contractor on the University of Canterbury’s new Ernest Rutherford science building which finally opens today more than a year late.

It is not yet clear what financial penalties or additional costs the company might face for delays in completing and commissioning the $155m building and to put right any defects.

University vice chancellor Dr Rod Carr said any extra costs incurred by Fletcher depended on the outcome of claims for time extensions being considered by the independent engineer overseeing the contract.

Final costs and claims could take some months to quantify, especially if they were disputed and needed to go to mediation as provided for under the contract, he said.