Twyford a no show as Kiwibuild hits problems

Phil Twyford’s Kiwibuild scheme has hit a major snag, and it is obvious that Judith Collins knew more about his issues than he did because she lined him up last week ahead of time for the collapse of Ebert Construction.

Just over a month ago Phil Twyford was waxing lyrical about the Northcote project😕 Quote:

A 1200 house re-development of Housing NZ land in Northcote will include up to 400 KiwiBuild homes for first home buyers, Housing Minister Phil Twyford says.

Twyford said the remaining two-thirds of houses would be an even split of state homes and market-price homes and the first homes were likely to be ready in 2019 although the development as a whole would take several years.

The announcement of the split between affordable KiwiBuild homes, state homes and market-price homes on the development comes as the July 1 date for the official “count” for the KiwiBuild policy looms. End quote.

Yesterday it was announced that Ebert Construction had tipped over:? Quote:

Major Auckland construction company Ebert is in receivership and workers have been locked out of sites, including the 153-unit Union Green project in the city this morning, receiver PwC has confirmed.

John Fisk of PwC said a statement would be issued shortly and he, Lara Bennett and Richard Longman were the receivers.

Companies Office records are yet to show the receivership which has not been confirmed by Ebert. But PwC’s business recovery team are out dealing with Ebert sites, the Herald understands.

PwC says: “Lara Bennett, John Fisk and Richard Longman from PwC were last night appointed receivers to Ebert Construction Limited as a result of a request made by the Ebert board of directors to its bank.

“Ebert’s board advise that it and the company’s newly appointed senior management team have been working to improve a number of poorly performing projects in the Auckland region which have adversely affected the company’s financial position,” PwC said.

“Last week, the board was advised of likely substantial increases in the expected costs to complete those poorly performing projects. Alongside those poorly performing contracts, the company’s portfolio of projects includes several well performing contracts. Notwithstanding this, the directors formed the view that the company could no longer continue trading given the impact of the actual and anticipated losses,” PwC said.

Fisk: “We are committed to doing the best we can for the staff, subcontractors and suppliers of Ebert. We will work closely with all parties involved with the contracts in progress to determine the best way forward.”?End quote.

Yesterday in the house Phil Twyford failed to front, putting Jenny Salesa under the hakapik of Judith Collins as the seal clubbing resumed: Quote:

National’s Housing Spokesperson Judith Collins has raised concerns about the Government’s KiwiBuild programme after one of the construction companies involved went into receivership yesterday.

Ebert Construction was due to commence work on a state housing development in Northcote, Auckland before it went under.

Ms Collins thinks this highlights the risk that New Zealand taxpayers will have to pay for the fallout.

“This is not the only construction company to go under this year and it probably won?t be the last,” Ms Collins said.

“This leaves private and government-backed housing developments vulnerable and raises real questions about how robust the KiwiBuild due diligence process is and how vulnerable taxpayers are to risks and cost blow outs associated with failed developments.”

The National MP raised the issue in Parliament’s Question Time today, asking Labour’s Jenny Salesa, who was answering on behalf of Housing Minister Phil Twyford, if the Crown bore any risk from developer insolvency.

“On behalf of the Minister for Housing and Urban development, in the buying off the plans initiative the Crown underwrite is only triggered on completion therefore there is no risk to the Crown in the event of a developers insolvency.

“In some cases there may be progress payments in which case liability is limited to the progress payments made.

“The KiwiBuild unit advises me however that these contracts are rare and they have not entered into any so far,” Ms Salesa replied on behalf of Mr Twyford.

It’s estimated at least $40 million is owed to creditors by Ebert Construction.?End quote.

Twyford was crowing about delivering 400 Kiwibuild houses next year. That is unlikely to occur now. It will take some considerable time to sort out the mess that is invariably left when construction firms collapse.