Fletcher Building v Perth builder BGC on leaky pipe problem; ‘negotiations continuing’

Fletcher Building logo. 16 October 2013 New Zealand Herald Photograph by Natalie Slade

Fletcher Building has accused Perth builder BGC of making “a crude attempt to place pressure on negotiations” by releasing information yesterday about the number of homes with burst pipes.

Fletcher issued an NZX notice on Friday morning saying it was still taking part in mediated discussions with the Western Australian Government and many West Australian builders, including BGC.

The aim was to finalise an industry response to plumbing failures occurring in Perth, it said.

On Thursday, Sam Gray, general manager of strategy and commercial at BGC, reported over 3000 total bursts in 1500 Perth homes that company had built, adding: “So we’re getting more bursts now than we had at the same time last year”.

“We have about 110 bursts per month over summer, with about 40 homes bursting for the first time each month. We’ve completed approximately 700 ceiling re-pipes, which are helping keep burst rates down, combined with an unusually warm autumn in Perth,” Gray said.

Pipes were still bursting in new homes.

More pipes burst in winter than in summer. Some homes were suffering their third burst pipes but he said “we also have homes that suffered more”.

Fletcher said on Friday negotiations over the Perth pipe problems were confidential and ongoing.

The public claims made by BGC were a crude and apparent attempt to place pressure on those negotiations, it said.

“Fletcher Building stands by its views on causation shared with the market previously. We do, however, note BGC’s acknowledgement that early intervention has proven to be a valuable mitigant, hence we look forward to settling an industry-led response with WA parties if possible.

“Fletcher Building remains committed to a sensible, data-led and proportional solution from all parties and to playing its part in that process.”

Gray of BGC said on Thursday the building business was awaiting the outcome of a product recall investigation that had begun last year.

“We ceased mediating some time ago,” Gray said, referring to discussions with two other builders as well as Iplex owned by Fletcher.

“We pulled out of that some months ago but this is 100 per cent a pipe manufacturing issue and it’s Iplex’s fault,” he said.

Fletcher went into a trading halt last year over the problems and established a $15 million fund while causes, resolution and industry solutions were developed, Taylor saying Fletcher was committed to helping the industry resolve issues.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.