Work continues on first stage of Kawarau Falls

More than $60 million has been poured into finishing the first stage of the troubled Kawarau Falls development in Queenstown since it was placed in receivership last year.

Receivers' reports released yesterday show that two companies associated with stage one of the $1 billion development owe first mortgagee BOS International (Australia) $180m, up from $117m from when it was placed in receivership on May 26.

BOSI (Australia) has lent Kawarau Falls a further $62.8m since the receivers took control and $64m has been spent on construction in the six months to November 25.

The ongoing investment will be good news for about 500 construction workers still building stage one, which includes three buildings under construction – two hotels and an apartment building.

But receivers have provided no indication about the future of the project other than "in the meantime work will continue".

The two companies in receivership, Melview (Kawarau Falls Station) Developments Ltd and Melview (Kawarau Falls Station) Investments Ltd are owned by Auckland developer Nigel McKenna, who was behind the overall development.

It is unknown if McKenna has secured funding for later stages of the development.

The two companies also owe $4.9m to unsecured creditors and previously owed $19m to second mortgagee Hanover Finance, which has been sold to Allied Farmers. The latest report does not mention if this debt still stood and receiver Brendon Gibson could not be reached for comment yesterday.

As well as construction costs, receivers paid themselves $1.64m and spent $795,645 on lawyers.

Kawarau Falls was planned as a 6.4-hectare resort village comprising 13 major buildings, offering around 1120 units. These were to include 900 to 950 apartment and hotel units and more than 150 residential units.

- © Fairfax NZ News