Archive | Avoca

Avoca falls on fixed price contract

Published: 6 July 2005


The Avoca construction group sent 4 companies into liquidation today, blaming building delays, liquidated damages claims & those problems coinciding with a market peak.



The companies are all headed by Mike McKeown, Rob Neil & Steve Taylor.


Mr McKeown said the companies in liquidation were Avoca Residential Ltd, which held the group’s Master Builders’ guarantees, Avoca Commercial Construction Ltd & 2 older companies which were no longer trading, Twilight Construction Ltd & Twilight Residential Construction Ltd.


Mr McKeown blamed Avoca’s $20 million construction project of the Fairview retirement village’s core block at Albany for the group’s woes: “Basically it got to the point, it was going to run at such a huge loss it was going to break the camel’s back. It’s been an acrimonious job since day 1 – it was tendered in 2003.


“Probably the main failing was the inflationary pressures on us because of our fixed price contract. On top of that, they wanted to dispute everything to the finish line.”


The retirement village, developed on the north side of Oteha Valley Rd beside State Highway 1 at Albany by Fairview Construction Ltd (Scott Vernon & Dave McFarlane), is close to opening. But Mr McKeown said Avoca couldn’t continue with that, or several other projects it recently took on.


“We took the view that, once we’d done our homework and done the numbers, we couldn’t trade any more.”


He said the group had started one new job 2 months ago, another one month ago, and it had another 3 about to start.


Apart from issues of “a dispute-ridden industry”, Mr McKeown said “the fact that we’ve been working at plus-peak in the industry for 2 years now has spread all the good resources, and we’ve struggled to get sub-contractors & labour to do the right job first time.”


Avoca has about 30 staff but Mr McKeown couldn’t say how many sub-contractors it employed. He was distraught at the demise of the group: “It’s 16 years’ worth of effort. It was something I’ve been proud of, and it’s just devastated me.”


If you want to comment on this story, write to the BD Central Discussion forum or send an email to bobdey@propbd.co.nz.

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