Mainzeal collapse costs $620,000
The Kapiti Coast District Council has taken a $620,000 bath after it paid out subcontractors left in the lurch after the collapse of building company Mainzeal.
On Monday, the council announced it would not recoup all $1.8 million owed after the collapse of Mainzeal, contracted to build the Coastlands Aquatic Centre.
The decision left the council covering $620,000 from its own coffers - a move that would save further legal costs with no guarantee of success, mayor Ross Church said.
Church said he was satisfied the council made the right call in cutting its losses.
"If we wanted to go further and try and get more money back out of Mainzeal and pursue people we'd have to then spend money on legal costs . . . we could spend half a million to get back half a million. It just gets to a point where you've got to stop bashing your head against a brick wall."
He said the council paid subcontractors to encourage them to return to the project after Mainzeal went into receivership in February last year.
Community services group manager Tamsin Evans said a substantial portion of the $1.8m was used to pay the subcontractors.
"While we haven't been able to ensure they are paid in full for all their work, protection of the subcontractors since receivership has been a priority for the council."
Church said it was "hugely disappointing" to cover the costs but the collapse of Mainzeal had been completely unexpected.
News of the Mainzeal collapse came in February 2013, just weeks short of the expected completion of the centre.
This month the council celebrated the first birthday of the centre.
- Kapiti Observer
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