KEY POINTS:
It started so promisingly. A $500 million housing project which ticked all the green boxes. Then the credit crunch hit and Kensington Park collapsed, leaving contractors out-of-pocket and homebuyers facing uncertainty.
Despite efforts to improve legal protection, it remains a law of nature: when construction projects collapse, sub-contractors
who are unsecured creditors get dragged under. For tradespeople owed money from Kensington Park, the timing couldn't be worse, with construction activity shrinking and consumers cutting back.
Collectively, debts are estimated between $4 million to $6 million among the 150 subbies. Some are owed six-figure sums, others between $10,000 and $30,000.
Remarkably, most are still in business - although Sunrise Earthmovers was an early victim and others are just clinging on. Sunrise was placed in receivership in August, owing Marac Finance $2.7 million and unsecured creditors $1.7 million. It was due about $1.1 million from Kensington Park, says receiver Steven Cammish of BDO Spicers. "That's probably what ultimately put them under."
THE PAINTER:
"It's an absolute failure for us," says Gavin Emms of North Shore Painting. "We've lost a massive chunk of our cashflow and there are others worse off than us - and we're heading into the worst year for decades."
Emms expects more firms will go under if money owed isn't repaid - the first receiver's report will be pivotal. "We're all in a holding pattern at the moment. There are guys about to lose their homes while the BNZ twiddles its thumbs over a few million dollars.
"The BNZ knows it doesn't have to pay any creditors. They'll be looking for the cheapest way out."
THE CARPET LAYER:
Floorcraft's Paul Askew's association with Patrick Fontein goes back several years - he even installed carpets in his Remuera home. "We always found him an honourable fellow who paid his bills."
Floorcraft is owed $230,000. "It has been disastrous for us; really hard.
"We have paid our suppliers, it's us who have taken the hit. You build up your capital over many years and it's suddenly taken away."
Askew is awaiting with interest the receivers' report and any sign of someone picking up the project.
"We'll box on but it will hurt.
"It won't be a very big turkey on the table this Christmas - more like a sparrow."
THE CRAFTSMAN:
"It's left a big hole in my annual accounts," says Graham Coote of AGC Handrails in Red Beach. The "one-man-band" is owed $11,500 and has had to pay his timber supplier.
"It was 75 per cent of my business - I was giving other work away and thinking I had another four years to go - fantastic.
"I've got unfinished work in there. I hope someone will carry it on. It would be nice to see some of my money."
THE BUILDING CONTRACTOR:
Matthew Hodgson of Ellerslie-based Archway Construction says his firm's saving grace was not having all its fingers in one pie. He had up to 15 carpenters on the site, doing framing and roof trusses, before growing wary over slow payments.
He has taken out a loan, guaranteed by his father, to pay wages owed to his crew. "I essentially have taken on their debt. If the old man hadn't helped me, I probably wouldn't have survived."
THE SCAFFOLDER:
Craig Mathers of Hibiscus Coast Scaffolding invested hundreds of thousands of dollars in equipment for the project, anticipating several years of work. Now he's struggling to organise another job. He expects to see little of what he's owed. "The average Joe who works for wages has no idea how much risk we have on our own homes. I've just increased the mortgage."
THE CHIPPIE:
Guy Abraham of Hibiscus Building Services had 10 labour-only carpenters working on the apartments this year. "I was there just long enough to clock up a hefty bill."
Abraham has paid his crew the wages they are owed and most remain with him. "It means it will be three-quarters of the year before we make any money. But there's not a lot of other work coming up."
THE CLADDING FIRM:
Rean Construction has gone from a medium-sized business bidding for major projects to a small player trying to pick up work in a recession, says director Tony Rean of Torbay.
"I've paid my guys and my suppliers - it wasn't their fault. But it's completely wiped out my cashflow to the point where certain jobs I can no longer look at doing.
"I've had to turn down big jobs and so we've taken a serious hit. I'm very reluctant to put serious money back into the business."
