Mainzeal failure lands ratepayers with millions more leaky homes debt

Mainzeal stopped work at the complex on Wednesday and yesterday security guards prevented access to working areas. Photo / Greg Bowker

The collapse of Mainzeal Property and Construction will cost Auckland ratepayers millions to settle a leaky-building claim.

The Auckland Council and Mainzeal were jointly liable for a multi-unit leaky-building case that was being settled in the old Auckland City Council area.

But with Mainzeal in receivership, the council's general counsel, Wendy Brandon, said that left the council as the "last man standing", with an extra burden on ratepayers of several million dollars.

"Unfortunately, as is often the case, the other parties have gone bankrupt or disappeared or can't pay and the council is left with the burden of the costs," Ms Brandon said.

Sally Grey, who manages the council's weathertightness claims, would not name the multi-unit claim.

Ms Grey said the claim was not related to the two-tower 97-unit Hobson Gardens repair job on Hobson St.

Mainzeal stopped work at the complex on Wednesday and yesterday security guards prevented access to working areas.

All told, 40 sites around New Zealand were locked down yesterday as receivers worked to get a grip on the failed company's liabilities.

Ms Grey said the council had contributed towards the Hobson Gardens settlement and was insured for any costs that could arise from the collapse of Mainzeal.

The council is due to meet receivers PwC to discuss the issue of joint liability with Mainzeal for leaky-building claims and the future of several council projects that the construction firm was undertaking.

Ms Brandon expected the $14 million upgrade of Shed 10 on Queens Wharf and a new $5.1 million library on Waiheke Island to proceed once discussions had occurred with PwC.

Work by Mainzeal on a new giraffe enclosure at Auckland Zoo is also virtually complete.