Faltering Fletcher Building blamed as another Govt project delayed
Friday, 17 August 2018
Fletcher Building has run into cost blow outs and significant delays with another Government project.
Fletcher's 20-month delay in constructing the new $77.8 million Greymouth Hospital is not only frustrating clinicians and patients, it will cost taxpayers an extra $1 million – or $50,000 per month – to keep the crumbling Grey Base Hospital running.
It comes after reports that Fletcher's $82m Novotel Christchurch Airport Hotel is likely to be 16 months late while delays in the construction of the Christchurch justice and emergency services precinct cost Fletcher an extra $100m. The New Zealand International Convention Centre in Auckland due to be completed in early 2019*, is now unlikely to open before the end of 2019.
Building of the new Greymouth hospital began in May 2016 and was due to be completed by April this year. It is now likely to be the end of 2019 before it is finished.
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* Greymouth hospital delay another 'bad news story' - Mayor**
A series of issues has plagued the build including incorrect cladding, the Kaikōura earthquake delaying steel manufacture and a decision to build the hospital without an administration block.
However, the new chairman of the group overseeing the project has blamed Fletcher Building.
Former Labour MP Clayton Cosgrove has been drafted by the Government to chair the West Coast Partnership Group.
'Fletchers have got themselves into difficulty. It would be fair to say it has absolutely slowed down the project. They've had a well publicised series of issues in terms of capacity and personnel and not meeting their deadlines,' he said.
He said the partnership group was keeping a 'close watch' on Fletchers.
He said he did not know what the final cost would be, except that it would be more than its original $77.8m budget.
'[Completion] could well be the end of next year. That's not palatable or acceptable to anyone on the partnership group. There are a variety of actions we can take to ensure the taxpayers' money is protected and that is upmost in our minds.'
The previous Government had 'stupidly' decided to build the hospital without an administration block.
'I walked in and found a void within the building. The previous Government's cost-cutting resulted in a situation where not all personnel can be housed in the building. That's being addressed by the DHB,' he said.
The new 8,500sqm centre, next to the current Grey Base Hospital, will have 56 patient beds, three operating theatres, a 24/7 emergency department, a critical care unit, acute and planned surgical services, a maternity ward and outpatient care.
Some cladding had to be removed from the building after it was found to be too thin. All 7mm ply sections failed waterproof testing and had to be replaced.
West Coast District Health Board planning, funding and decision support director Carolyn Gullery said the existing facility was old and difficult to maintain.
't is estimated that delays in the new facility becoming available for use costs approximately $50,000 per month. Unbudgeted maintenance currently sits at $30,000,' she said.
Association of Salaried Medical Specialists Greymouth president Paul Holt had previously said the old building was putting staff and patients at risk because part of it was only 16 per cent of earthquake standards.
The Specialist Trades Contractors Federation president Graham Burke previously told Stuff many of the recent failed big projects had been procured by the Government.
Some firms were going under because they had underpriced projects or accepted special conditions in contracts and battled with a lack of resources, he said.
Prime Minister Jacinda Ardern told the Infrastructure New Zealand forum the Government was warning its agencies and departments to follow procurement guidelines. Too many agencies had followed a least-cost procurement model that had left some firms with too much risk in their projects.
Fletcher Building announced an operating earnings loss of $322 million for the six months ended 31 December 2017, compared to a $310m profit before significant items for the last six months of 2016. It is pulling out of the vertical construction sector completely.
A Fletcher Construction spokeswoman said the company was working through the project timeline with the client.
* An earlier version of this story incorrectly said the Convention Centre in Auckland was due to be completed in 2015. In fact, that is the year Fletcher Building was contracted to build it.