Damage assessment and demolition continue at Auckland’s $750 million New Zealand International Convention Centre after the devastating fire three years ago.
But rebuilding has also begun, and work to reinstate the roof is scheduled to begin next month.
John Salier, Fletcher Construction’s executive project director, was upbeat about progress at the centre, spanning much of the Hobson/Nelson/Victoria/Wellesley street blocks, despite client SkyCity Entertainment Group telling shareholders at the half-year result report in February work was taking longer than expected.
“We’ve almost completed the huge job of damage assessment and demolition. Meticulously undoing our work is arguably the hardest part of the entire project, but it’s given us a solid foundation for the work ahead,” he said.
“With the project’s structural steel arriving back on-site after post-fire remediation, we are now back into forward construction. Visible progress is being made and we are expecting the roof reinstatement to start mid-May,” Salier said.
The pandemic and problems getting materials to the site affected timelines “but I’m confident we’ve done everything we can to mitigate these issues with very careful Covid-19 protocols and planning”.
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“Some of the construction methods required since the fire have never been seen before in New Zealand. This means we’re not just building a beautiful and functional convention centre, we’re growing a construction workforce with skills to enhance the industry as a whole,” Salier said.
SkyCity said in February that the convention centre and Horizon Hotel projects were “complex but progressing”.
The privately funded project will be a “significant investment in the future of Auckland”.
SkyCity had an exclusive casino licence until 2048, it stressed.
The latest Fletcher programme indicated the hotel would be finished in 2024 and the convention centre in 2025.
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The company remained “comfortable” with contractual positions on the project and there was no material change to previous guidance that the project would cost around $750m.
Around $120m of net cap-ex was to have been spent by January, including reinstatement works paid for by insurance.
The insurance payout is $336m.
Up to 150 firefighters battled the blaze, which started on October 22, 2019, and took 10 days to fully extinguish.
Fire and Emergency NZ found that a cardboard core of a waterproof roofing membrane roll smouldered for more than half an hour during a lunch break before it burst into flames, causing the 10-day fire.
The cardboard roll had been inadvertently exposed to a worker’s gas torch and burned undetected for 38 minutes, according to investigators.
In February, SkyCity reported a loss for its latest half-year of $33.7m, down 143 per cent on the previous year’s profit of $77.9m.
Revenue fell 35 per cent from $449.9m to $289.8m, the business citing Covid disruptions and the impact that has had on how it performed.
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The business, which employs 4000 people, released the result for the six months to December 31, 2021, declaring no interim dividend for shareholders.
Adrian Allbon, Jarden equity research director, said that outcome was anticipated.
“Overall, the result was broadly consistent with our expectations and heavily impacted by Covid-19 restrictions.
“Our positive investment case remains value-based and medium-term outlook from SkyCity highlights potential earnings leverage once Covid-19 restrictions ease,” he said.
SkyCity shares are trading around $2.89, down 15 per cent annually.
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