Bulk of outstanding $21m tied up in disputes
Hartner Construction Ltd has been placed in receivership after facing the threat of collapse for 18 months.
The privately owned company grew during the 90s to become New Zealand’s fourth largest construction business, but in the run-up to the millennium its cranes started wearing Multiplex colours as the big West Australian competitor entered the New Zealand market to take the most prominent jobs around Auckland, such as Metropolis, Chancery, and the Spencer on Byron hotel in Takapuna.
Hartner won most of the work on Princes Wharf, the first four sheds containing apartments, cafes and bars in the Kitchener Group redevelopment project, held on to win the Hilton Hotel project at the end of the wharf but lost the most luxurious of the apartment sheds, on the western side beside the hotel, which went to upstart Goodall ABL.
John Greenwood, who brought the Southland ABL name to Auckland by buying the Goodall business and putting the two together, is back selling real estate, promoting coastal property for Bayleys. His Goodall ABL operation collapsed last March, a victim of trying to win market share on no margin, with a maximum guaranteed price contract in place. ABL Construction, minus Mr Greenwood, continued the job.
Struggle through wind down from boom
Hartner Construction, meanwhile, hung in, though it also relied on continuing forward business to stay afloat.
Trouble with that policy was, Auckland, and in particular the Viaduct Basin, had a construction boom leading up to the America’s Cup contest, with no sustainable construction industry to keep companies busy afterwards.
The apartment boom has faded, although a handful of projects remain on the books. Added to Hartner’s problems, its move to Pacific Islands business was hit by the Fiji coup, at a time when the company was looking at a second timeshare contract on Viti Levu.
Still, for the moment Hartner has a future. Hartner Construction and Hartner Group have been placed in receivership, run by a team at PricewaterhouseCoopers, not in liquidation. Another company in the group holds Mr Hartner’s interest in the Excell public services business which he bought from Manukau City Council with Eric Watson.
About 12 projects left
Hartner has been winding down for the past 12 to 18 months, but has about 12 projects still running. John Waller, of PricewaterhouseCoopers, said Princes Wharf was the biggest, but tonight he was still trying to quantify the various jobs.
Hundreds of subcontractors are involved â€” Mr Waller was unable to say how many. He was also unable to say how big Hartner’s debt was.
“A lot of the debt relates to jobs in dispute and pay-if-paid â€” $13 million of jobs in dispute, including $8 million with pay-if-paid clauses, and another $8 million of debt.”
Princes Wharf in final stages
Kitchener Group managing director David Henderson said the Princes Wharf project of 297 apartments, some commercial space and the hotel was in its final stages, with Hartner completing the hotel fitout.
Bad vibes between developer and builder have been evident for months, with the inevitable construction industry disputes over quality and completion at final payment times.
Mr Henderson said Hartner had tried to enforce a $3.5 million claim for payment in the High Court in September, but was unsuccessful.
“The Hilton Hotel has already been substantially completed. We will be working very closely with all interested parties to ensure construction continues as scheduled,” he said.
Mr Waller also said talks would be held, in his case to see that Hartner can keep working.
That won’t be easy. The liquidator of a large subcontractor, Alotech Walls & Ceilings, has a High Court hearing scheduled in a fortnight, seeking Hartner’s liquidation.