Saturday, 15 May 2021

SkyCity fire NZ’s biggest repair job: Convention centre $340m-plus to fix, ‘slower than expected’

SkyCity Entertainment Group’s NZ International Convention Centre is taking longer to fix than initially expected, and the cost has risen.

The job is now likely to cost at least $340 million, up from $336m last year, and the new hotel won’t be finished this year as initially forecast.

In its half-year result to December 31, released on Thursday, the company said: “Reinstatement works progressing but slower than expected. Following completion of revised damage assessment, now expect reinstatement costs of at least $340m.”

On a happier note, the company said insurers were responding to claims and it remained comfortable with the contractual position on the project.

It will be next year before SkyCity opens its 303-room five-star Horizon Hotel between Hobson St and Nelson St, beside the NZICC. Last year, the hotel’s repairs were forecast to be done by 2021.

The hotel would now be completed during the first half of 2022 and the NZICC by the end of 2023, the company said.

In a reference to withholding payments from Fletcher Construction for late work, SkyCity also cited “liquidated damages of $39.5m”. Those were not recognised as income whereas previously they had been a contingent asset.

SkyCity said about 500 basement car parks damaged by the fire would be “reinstated” this year.

Ross Taylor, chief executive of Fletcher Building, whose subsidiary Fletcher Construction has the head contract to build and now fix the NZICC, also gave an update on progress this week after his company’s half-year result.

“Broadly, we have removed all the damaged steel in the top and are not far off completely getting rid of all the issues and decontaminating the mould. The focus this year will be on the big pieces of equipment like the escalators, plant room and generators to be refurbished or repurposed,” Taylor told the Herald.

Damaged steel roof support structures were removed but it would be some time before new structures were up and the centre could be closed in against the weather with a new roof, he said.

The roof, where the fire broke out two years ago, might also be redesigned.

“We’re looking at roof alternatives. It might be a smarter or a simpler way to do it. We’re working with SkyCity and Auckland Council because if we change it, it needs to be reconsented.”

Architects Warren & Mahoney were also working on those plans, he said.

Work on the Horizon Hotel was essentially finished but services from the giant centre next door needed to be reinstated because the hotel got those services via the NZICC, Taylor said.

“Broadly speaking, it’s finished inside. But we have to get the services down into the NZICC for the hotel. But the rooms are all finished. It looks like a completed hotel when you’re inside but it’s just getting those services from the convention centre.”

Last year, the Herald reported how materials from levels five to seven are being stripped out for repairs.

The first conventions could be running by 2024 if work remains on track.

Chris Haines, a director of consultants Rider Levett Bucknall, which publishes quarterly fixed tower and crawler crane surveys, has said previously he has no doubts the centre will be a vital national asset when completed.

“If you want to have a world-class city, Auckland needs a world-class convention centre.

“If you’re saying there [should be] no convention centre, you’re saying there’s no tourism.

“You need to look two, five, 10 years out,” he said.

Even though in the shorter term, Covid might rule out mass conventions of 2000 to 3000 people, which the centre is designed for, “there’s no white elephant about it”.

He compared the centre to the Auckland Harbour Bridge, saying it had its detractors when it was opened in 1959.

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