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Premier contract dumped

The abandoned construction site at Premier Beehive’s Carterton factory. PHOTO/FILE

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The receiver of collapsed Ebert Construction is walking away from the contract to build a $10 million extension to the Premier Beehive factory in Carterton.

Premier Beehive chief executive Dene McKay described the situation was a “nightmare”.

“But we are determined to get it done. Definitely, for the region we will do it,” he said.

The company now has to decide whether to complete the job in-house or to get a new contractor in to finish it.

He said the company was confident it could deliver goods to customers throughout the busy Christmas period, but the factory would be “tight for space” as some of the old factory had been taken down to make way for the new development.

Ebert collapsed this month, affecting huge construction jobs around the country.

The Premier Beehive contract was believed to be the largest current commercial contract in Wairarapa.

Receiver John Fisk of PricewaterhouseCoopers would not say if the contract was loss-making but would say the cost of completing the contract was greater than what would be received in payment, and that was why the decision was made not to complete.

The collapse affected subcontractor Waterwise Wairarapa, but the company has been able to get its tools from the site.

The company could not be contacted on Friday.

Fisk would not be drawn on how much in each dollar subcontractors like Waterwise were likely to get.

Fisk said he had dealt with receiverships of construction companies throughout his career, including back in the 1980s when Wilkins & Davies collapsed.

“There are some that do it very well and are very organised and then there are others when it is under-capitalised,” Fisk said.

They run into problems when there are delays or cost escalations.

He said material costs had increased in recent times.

“If you have entered into a fixed-price contract you wear the price escalation,” he said.

McKay said the situation was complex and his company had to get the plans back and determine exactly what had been signed off and what had not.

He had previously said the contract was about 75 per cent complete so the collapse of Ebert at that point of the process had been disappointing.

PwC had informed Premier Beehive on Wednesday afternoon that they would not be undertaking the completion of the contract, McKay said.

“It’s now left to us,” he said.

He was hoping that by the middle of this week, Premier Beehive would be able to say how it was going to take things forward.

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