Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Specialist Trade Contractors’ Federation on Mainzeal

February 7 2013

Specialist Trade Contractors’ Federation calls for equitable treatment for Mainzeal sub-contractors

The Specialist Trade Contractors’ Federation (STCF) has warned that the 400 Mainzeal staff affected by the firm’s collapse is just “the tip of the iceberg”.

STCF president Graham Burke said there was likely to be three or four times that number of sub-contractors working for the company and now facing financial uncertainty.

He called for receivers PwC to provide assurances that sub-contractors will be treated equitably and that retentions which have been held by Mainzeal will be paid out.

Construction firms often hold up to ten per cent of a sub-contractor’s total invoice as a retention, without interest, for up to two years after the completion of a contract by way of a guarantee.

“While the Mainzeal staff, Inland Revenue, banks and finance companies will be the first to be paid out, sub-contractors are treated as unsecured creditors,” said Mr Burke.

“When Hartner collapsed in 2001 it was holding millions in retentions, the amount held by Mainzeal could run into tens of millions.

“The STCF has been lobbying for the introduction of a binding security of payment for sub-contractors. We are seeking assurances from PwC that Mainzeal sub-contractors will be treated equitably regarding payments owed to them and that retentions, which have been paid by the client, will be paid to the sub-contractors, who have provided the materials and labour and carried all the risk.”

Mr Burke said that some sub-contractors would be owed significant sums and, if they were not paid, that could make their own businesses insolvent.

“Potentially, if sub-contractor businesses start to go under because of this, it could create a ripple effect up and down the chain because they then may not be able to pay the smaller sub-contractors working for them, even those not working on Mainzeal sites.

“Also, if sub-contractors with large exposure to Mainzeal have to be wound up and can’t complete jobs they are working on for other construction firms, then those companies may struggle to find new sub-contractors willing to complete the work at historic rates.

“That makes it all the more important that the receivers act swiftly to provide answers for sub-contractors and some confidence for the industry.”

Mr Burke said that the STCF is also concerned that the issue of security of payments for sub-contractors is not reflected in amendments to the Construction Contracts Act which is due to go through the Bill process.

The Specialist Trade Contractors’ Federation is an umbrella group representing the interests of specialist trade contractors in New Zealand.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Shocking Dairy Footage: MPI Failing Our Animals And Damaging Our Reputation

Greens “Nathan Guy needs to urgently look into how his ministry is enforcing animal welfare standards, how these appalling incidents happened under its watch and what it’s going to do prevent similar incidents happening again in the future." More>>


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news