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.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news