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Contractors locked out as Mainzeal collapses

Published: 6:33AM Thursday February 07, 2013 Source: ONE News

Furious subcontractors are desperately trying to get their tools which are locked in a Wellington Mainzeal construction site.

Their attempts come after Mainzeal Property and Construction called in the receivers, blaming cashflow problems and a decline in commercial construction.

Hundreds of jobs are under threat with the firm employing more than 400 workers and involved in the Christchurch rebuild.

Have you been affected by the Mainzeal collapse? Do you have tools locked in a closed site? Email

Contractors have been forced to wait and see whether they will get the money they are owed. And those ONE News spoke to are not optimistic.

Contractor Mike Bingham said a lot of the tools locked in the Wellington construction site are needed for other jobs.

"And if we can't bloody work then we can't really feed our families or do anything can we," he said.

Rob Bassett, from Bassett Drainage and Plumbing, said his digger is also in lockdown, after 17 of his workers were sent home from two Mainzeal sites in South Auckland. 

"If you've got all your eggs in one basket I'm afraid it's going to be very very tough," he said.  

Labour Exchange's Dave Devereux said people will go out of business because of the collapse of the company.

"Without a doubt, and then of course they have got families to feed so the ripple effect will be felt for months. It will be widespread."

NZ Specialist Trade Contractors' Federation Graham Burke said: "What people don't realise is that most subcontractors in the construction industry in New Zealand are unsecured creditors so they're fourth or fifth in line."

ONE News reporter Nicole Bremner said there is widespread shock across the whole construction industry.

She said countless staff and independent contractors are waiting for word from receivers, and they are unlikely to hear from Mainzeal until next week.

It was tough at Mainzeal headquarters in Auckland, she said, where workers were sent home with scant information and even less job security.

One worker said: "Always s*** to lose your job but I don't really know if I've lost it yet."

ONE News understands that the pay last night for Mainzeal's construction and building staff did not go through. This could amount to tens of thousands of dollars.

Impact on Christchurch rebuild

The company has been involved in the Christchurch rebuild through projects including the demolition of Clarendon Tower, a 17-storey central Christchurch building which was badly damaged in the February 22 quake.

As a managing contractor, Mainzeal was paid directly by CERA, and then employed subcontractors who carry out the work, and in many cases carry the cost of materials.

CERA says it is up to date with payments to Mainzeal, but some subcontractors ONE News spoke to say that has not trickled down.

One major partner says it is owed more than $1.5 million.

But today the Government hinted that it could open its cheque book to bail them out.

Canterbury Earthquake Recovery Minister Gerry Brownlee told subcontractors not to panic.

"Mainzeal were one company, that void will be filled because there is demand what we want to do is where CERA's involved subbies do get paid," Brownlee said.

Mainzeal is also partnered with insurers Vero and AA in the residential rebuild in Christchurch. But the receivership is not expected to stop that work going ahead.

"Mainzeal's role there has been much more as a project manager rather than doing the actual building and I'd have thought it'd be pretty easy for Vero to find other arrangements," CERA chief executive Roger Sutton said.

"But you know there'll be a few weeks where things are a little uncertain."

Uncompleted projects

It is also a high stakes wait too for those with uncompleted projects, like a new $95 million campus at Manukau Institute of Technology.   

"It has all been discombobulated by the receivership of Mainzeal and we just have to establish the lines of contractual responsibility so we can get back on track again," MIT chief executive, Dr Peter Brothers said.

It is the same story across road - the Manukau Court project is one of five Mainzeal is working on for the Ministry of Justice.

But the Prime Minister says it is not all bad. 

"If the company is liquidated, which looks like it is going to be the case, it's highly likely that it will either be bought in part or in totality and certainly we would expect those workers to be find jobs in other places," he said.

But some say it is a kick in the guts and the industry deserves more respect from the Government.

"This is our future with all our young people coming through all our trade training apprentices and everything else and I am afraid this has a major dramatic effect on that," Bassett said.


PWC partners Colin McCloy and David Bridgman were appointed as receivers for Mainzeal and associated entities, as a result of a request made by directors to Bank of New Zealand. They met last night to determine the firm's options.

Mainzeal director Richard Yan said that after "a series of events that had adversely affected the company's financial position" and a general fall off in commercial construction work, the company could no longer continue trading.

The company was no longer getting shareholder support, he said.

McCloy said they were committed to doing the best they could for suppliers, staff and subcontractors of Mainzeal.

"We will work closely with all parties involved with Mainzeal contracts to determine the best way forward," he said in a statement.

ONE News understands that three of the former directors that resigned yesterday did not know until the end of last year that they did not have a capital to keep things ticking over.

Paul Johnston from the EPMU said: "It was a shock - even to Mainzeal management, I was talking to the manager before the meeting and even he didn't know anything was going on until yesterday. All of our members found out through the media."

Nicole Bremner said the receivers are doing a site by site audit, and PWC are urging anyone who thinks they are owed money with to file a claim with them.