Despite the predicted high demand for reconstruction after the 2011 earthquake, one of New Zealand’s largest construction companies, Mainzeal Property and Construction, has gone into receivership.
Said to be the country’s third biggest building company, Mainzeal was founded in 1968 and employs more than 400 people.
One local newspaper quoted a source as saying that Mainzeal had been hurt by claims connected to leaky apartment buildings.
In a statement, Mainzeal director Richard Yan said the company could no longer continue trading due to a "series of events that had adversely affected the company’s financial position", combined with a general decline in commercial construction activity and lack of shareholder support.
Mainzeal, said to be the country’s third largest building firm behind Fletcher Construction and Hawkins Construction, has built some of the country’s largest structures, including Auckland’s Vector Arena.
Apartments in Christchurch being demolished after the February 2011 quake. IMF estimates reconstruction to cost $15bn, eventually (Credit: Calvin Payne)
It was also involved in several major rebuilding projects following the earthquake and subsequent aftershocks that destroyed much of Christchurch in 2011.
The IMF has estimated the cost of rebuilding homes, office towers and other buildings to be in the region of NZ$15bn.
But that hasn’t resulted in an immediate flood of work. Ongoing aftershocks, bottlenecks in settling insurance claims and the need to develop new zoning have all delayed the expected building boom.
Writing in a company newsletter in December 2012, Mainzeal’s chief executive Peter Gomm said the commercial building industry outlook was actually poor, the New Zealand Herald reported.
Gomm predicted there would be too many builders chasing too few contracts in the coming months.
"Unfortunately the first half will be soft with too much capacity in the non-residential sector chasing too few quality projects," he wrote.