Richina Pacific offshoot Mainzeal has won the $250 million contract for the biggest brewery construction project by Lion Breweries in 148 years.
Mainzeal announced that it had secured the contract yesterday, beating three other tenders for the four-year construction project in East Tamaki.
Starting early next month, the brewery development will clash with the revamp of Eden Park, the first stage of which - a $190 million redevelopment of the South Stand by Fletcher Building - is to be started in August next year. The clash raises the fear of labour shortages and delays.
Mainzeal chief operating officer Peter Gomm would say only that the project had been well prepared and had supply relationships in place to ensure no problems.
Mainzeal, owned by listed company Richina Pacific, lost $22.2 million from delays and structural problems with the construction of Auckland's Vector Arena. In July, Richina Pacific director Jenny Shipley said the company had filed legal action against Crawford Architects to recover some of the losses, and there was a possibility of other lawsuits.
Mr Gomm refused to discuss legal issues surrounding the Vector Arena project.
Richina Pacific shares closed unchanged at 45c yesterday.
Auckland Chamber of Commerce chief executive Michael Barnett said the two big projects would not suffer a lack of labour as residential building had slowed and there were plenty of tradesmen looking for work. "You have the same issue when you look at the number of roading projects going on in Auckland; most are on track and will be completed on time."
The Eden Park project has suffered delays because of the debate over funding, to the point where there has been criticism that it will not be finished in time for the 2011 Rugby World Cup. Mainzeal withdrew its tender for the project before Fletchers was awarded the job.
Fletchers infrastructure chief executive Mark Binns said the project was on track to be completed by the end of 2010.
Lion Breweries spokeswoman Liz Read said the brewery shift had been inevitable because of logistical constraints at the the current Newmarket site.
"Had we made the decision to stay, we would have had to spend upwards of $40 million upgrading the brewhouse and when you make that investment you have to stay put for another 50 years. It was not a practical option."
Lion sold the Newmarket site to AMP Capital Investors for $162 million in September, but will remain there for four years rent-free till their new brewery is completed.
Once Lion has gone, the site is to become a retail-residential mixed development that could take up to 10 years to complete.
The new site covers nearly 17 hectares, more than three times the size of the Newmarket site, and will incorporate bottling plants and off-site warehousing.
The new brewery is designed to improve the sustainability of beer-making, mainly through reducing water use.
- The Dominion Post
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