SkyCity sues Fletchers for $330m over convention centre delays
Intended to open in 2020, the project was delayed after a devastating fire hit the construction site the year before the opening date.
In a statement this morning, SkyCity said it had incurred losses due to the delays, including as a result of the fire.
Fletcher Building said it would "vigorously defend itself" against the claim.
SkyCity said the project was nearly six and a half years behind the contractually agreed delivery date of January 2019.
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"SkyCity's claim alleges that Fletchers' breaches of contract, including those which caused the fire, constituted gross negligence, and/or a persistent, flagrant or wilful neglect to carry out obligations under the building works contract," the business said on NZX.
SkyCity claimed it was entitled to $330 million in liquidated damages from Fletchers under the contract.
"SkyCity has attempted to resolve these claims by agreement with Fletchers but has been unable to do so."
SkyCity chief executive Jason Walbridge said the convention centre was supposed to take around three years to build, but had taken almost 10.
'This is a project of key importance not only for SkyCity but also Auckland and the wider New Zealand economy," he said.
Walbridge said SkyCity remained "confident" of its February 2026 opening for the convention centre, and expected the building to be handed over in the second half of this year.
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"We are ramping up for opening with recruitment for key positions already underway and exciting plans to celebrate finally being able to open our doors and welcome visitors to enjoy the world-class experience we will have on offer'.
Fletcher Building acknowledged the legal action and said it would "vigorously" defend itself.
The company said it had already paid "significant" liquidated damages to SkyCity over the delays.
The NZICC project, located on Hobson St in the city centre, is adjacent to Auckland's Sky Tower and spans 32,500 square metres over four floors. (Source: Supplied)
"Accordingly, Fletcher Construction will vigorously defend itself against the SkyCity claim for further liquidated damages beyond the capped amount provided for in the building works contract," its statement to the NZX read.
"Whilst the delivery of the NZICC project has suffered from a number of challenges, including as a consequence of the fire and Covid-related impacts, Fletcher Building rejects absolutely that it has breached its contract with SkyCity in the manner alleged."
It said the risk of dispute with SkyCity over the delay and costs associated with the NZICC had been flagged previously.
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Fletcher Building confirmed it had completed construction work on the convention centre. It said the focus had now moved to remediating defects, completing the complex commissioning processes, and securing required Council sign-offs. It sought to work collaboratively with SkyCity.
"Fletcher Building anticipates handing over the site to enable SkyCity to commence its operational readiness activities during the second half of 2025, in preparation for SkyCity's announced opening in February 2026."
Fletchers said the net costs to complete the project had been reassessed, considering the costs and resources estimated to be required for the final stages.
"With the result that Fletcher Building expects to record a further provision of c$12–15 million, in addition to provisions previously reported in February 2024. That provision does not include any costs associated with the SkyCity dispute announced today."
The company also said it continued to pursue recoveries under the convention centre's insurance policy of more than $100 million and had brought legal action against the roofing membrane subcontractors concerning the fire. Fletchers said those proceedings would commence at the High Court "shortly".
"While the Company considers it has good grounds to recover material amounts under the TPL policy and the Court action, it has not recognised any recoveries at this time."
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