Failed transport hub: Tauranga council appeals High Court decision over costs

The failed Harington St Transport Hub pictured in March 2020. Photo / Andrew Warner

Tauranga City Council is awaiting a new trial date in its bid to recoup millions of dollars lost in a failed transport hub.

The council has appealed a High Court decision that meant it could only receive a fraction of the $20 million it lost on the abandoned Harington St Transport hub.

The council wanted to recoup the losses it says exceeded $20m from the companies involved in designing and reviewing the defective hub.

The $29m transport hub was intended to be a nine-story building with space for 550 cars and 250 bicycles in Tauranga’s CBD.

The project had already cost council $19m when construction was halted in September 2019 over seismic design issues.

Tauranga City Council (TCC) abandoned the partially built hub in 2020 and eventually sold the site to the original construction company for $1 in 2021.

TCC went to court claiming there were contract breaches by contractors Harrison Grierson Holdings, which designed the structure, and Constructure Auckland Ltd, which was engaged to review the structural design.

Losses included more than $20.5m in “wasted costs” and the loss of land value exceeding $5.3m, the council says.

Tauranga City Council general manager infrastructure Nic Johansson. Photo / Alex Cairns

In the High Court case in May 2023, the defendants argued the liability limitation clauses in contracts capped how much they could be liable to pay.

Justice Kiri Tahana released her decision in March 2024, stating the limitation of liability clauses in the contracts did apply.

This set the maximum liability of Harrison Grierson at $2m in the aggregate and Constructure Auckland’s liability to a maximum of $500,000.

Council’s general manager infrastructure Nic Johansson said the council appealed the High Court decision in May because it disagreed with the set liability limits.

The hub was intended to help restore economic vibrancy to the city centre, he said.

A hearing date is yet to be allocated by the Court of Appeal.

The new owner of the site, Watts & Hughes, is building Panorama Towers, a 14-storey office and commercial development with 330 car parks. Construction of the $60m project began in early 2023.

How the transport hub’s failure unfolded

In March 2017, Tauranga City Council invited two structural engineers to tender for the design of the hub, with Harrison Grierson winning the contract.

Harrison Grierson was tasked with producing a structural design and services, design drawings and specifications suitable for consent purposes.

In November 2017, Constructure provided a fee proposal to TCC for a structural peer review of the proposed transport hub.

Between March and November 2017, Harrison Grierson prepared the structural design and specifications for the car park.

TCC applied for building consent in January 2018.

In March 2018, Constructure issued a producer statement confirming compliance with the building code.

The council issued building consent in July 2018 and Watts & Hughes Construction Group was awarded the building contract.

In January 2019 Watts & Hughes contacted Harrison Grierson, concerned about part of the design relating to the pouring of concrete floors. Harrison Grierson confirmed its methodology for the concrete pour.

An artist's impression of how the Harington St Transport Hub would have looked had it been completed. Image / Supplied

In March 2019, Watts & Hughes noticed a structural beam had twisted following a concrete pour.

Between June and July 2019, seismic design problems were revealed.

A structural review found floor, column and bracing weaknesses.

In September 2019, construction was halted and later that year work began on a remedial strengthening design.

By May 2020, the construction company and engineering firms could not agree on a strengthening design.

In June 2020, a closed-door meeting was held with the mayor and councillors to decide the hub’s fate.

A decision to abandon the project was made because of the “prohibitive cost” of remediation.

In March 2021, the site was sold for $1 to Waibop (Hamilton) Ltd - a subsidiary of the original construction company Watts and Hughes. The agreement meant the new owner would take responsibility for the property and existing structure.

In November 2021 the new owners Watts & Hughes applied for resource consent for Panorama Towers, a 14-storey office and commercial development with 330 car parks.

Construction began on the $60m Panorama Towers in early 2023.

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