Mainzeal collapse costs $620,000

JOEL MAXWELL
Last updated 10:43 21/08/2014

Relevant offers

Kapiti Observer

Waikanae Primary School locked down due to false alarm Green Party freight policy would electrify Waikanae-Palmerston North railway Resident criticises pool food options at Coastlands Aquatic Centre, Paraparaumu Whareroa Farm trail commemorating US marines in Kapiti to be opened Winston Peters: KiwiRail insider says they're looking to shut Palmerston line Never underestimate the value of performing arts: entrepreneur Otaki Surf Life Saving Club and Paekakariki Surf Lifeguards win big at awards Kapiti boxer Jamie Price wins first bout for three years in Palmerston North Otaki's Whiti Te Ra enjoy unbeaten start to Wellington club rugby league season Genealogy group helps Kapiti woman uncover family history

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.

Ad Feedback

- Kapiti Observer

Special offers
Opinion poll

Should Kapiti have international airport?

Yes, there's plenty of land there

No, it's too far for people to travel to

Maybe

Don't care

Vote Result

Related story: (See story)

Featured Promotions

Sponsored Content