The head of SkyCity says the inferno at the company's $700 million convention centre is "absolutely devastating for us" - but says the building will survive.

CEO Graeme Stephens said it was lucky no one had died in the fire that broke out yesterday afternoon.

"Very thankfully we are not dealing with human loss," he told reporters this morning.

"This has been absolutely devastating for us," he said.


"We have worked incredibly hard to get to where we were."

SkyCity CEO Graeme Stephens, left, and Ross Taylor, CEO of Fletcher Building Limited, at today's press conference. Photo / Jason Oxenham
SkyCity CEO Graeme Stephens, left, and Ross Taylor, CEO of Fletcher Building Limited, at today's press conference. Photo / Jason Oxenham

Stephens was confident the convention centre project could be rebuilt and open in the future.

"The damage is significant, the fire is still raging.... that will lead to a material delay. We don't know the extent of that yet."

He said after the damage had been "calibrated" he could better estimate the loss and delay.

Stephens said he had been inspecting the convention centre yesterday morning - just hours before the blaze began on the roof.

"We were literally signing off hotel rooms and you could see the internal shape... I left the site very bouyed, very excited."

Hours later he got the call about the fire.

He said the construction was on track for delivery next year and it was disappointing to see work destroyed.


Stephens thanked the frontline emergency services staff battling the blaze, acknowledging their "immense efforts".

SkyCity had a crisis management plan that he hoped he would never have to activate.

But to see his staff pitching in and the plan being implemented was heartening.

"This is a discussion around buildings and money and time - but not people."

Stephens acknowledged SkyCity customers and said the hotel, restaurants and conference areas were all full when the evacuation began.

"Hopefully we can make it up to them."

He thanked the wider hospitality industry for their help and support.

Insurance: Who pays?

Earlier today, Fletcher Building and SkyCity Entertainment confirmed they have contract works and third party liability insurance in place on the New Zealand International Convention Centre construction site but an investigation has yet to start on the cause of the fire.

"Once the fire has been extinguished and it is deemed safe to re-enter the site, investigations can commence to determine the cause of the fire and assess the extent of the damage," the company said in a statement to the NZX.

"The company will commence an investigation and will assist with all other investigations to be conducted.

"Once the extent of the damage is known the company will be able to determine the impact on the project delivery timeline, in consultation with SkyCity. It is expected there will be a material delay."

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Staff from both companies are understood to be gathered at a central command centre in the CBD near the convention centre. Some Fletcher chiefs have left their Penrose headquarters and are now stationed in the CBD to be close to the centre.

Focus Live: What blaze means for Fletcher Building and SkyCity

That means it will immediately halt the liquidated damages claim that the casino operator has against Fletcher.

A construction expert, Selles said it is too early to tell if any party will become liable, as it will depend on the reason for the fire.

In October 2015, SkyCity and Fletcher Construction signed a $477 million contract for the lead role in the $700 million project to build the convention centre and a new five-star hotel. At the time, SkyCity said the contract had insurance covering comprehensive building works, public liability, and professional indemnity.

However, delays and cost blow-outs saw the project become an albatross around the building company's neck, a major contributor to its near $1 billion of construction losses over an 18-month period.

Those delays had already caused the casino operator to review all of its 2020 bookings, and it has been in consultation with union delegates over the likely loss of eight jobs from its existing convention centre workforce.

Any further delays to the convention centre opening have already created uncertainty for firms servicing events.

Oceania Productions technician Garrard Hobson said his company already booked to do several jobs at the new centre and it is unclear what it would mean for his company.

The market reacted despite the absence of any concrete information, with SkyCity shares falling to a seven-week low before ending yesterday at $3.87, down 2.8 per cent, with more than twice the 90-day average number of shares traded. Fletcher's shares fell 1.5 per cent to $4.65, although upcoming MSCI index reweightings are seen as the likely driver of that movement.

Fletcher thanked the fire and emergency services teams for their hard work in challenging conditions to ensure the safety of all.

SkyCity also released a statement this morning describing how the NZICC was immediately evacuated.

"For precautionary reasons, the wider SkyCity Auckland precinct (including the Sky Tower, casino, SkyCity Hotel, SkyCity Grand Hotel, car park, restaurants and corporate offices) was also evacuated and will remain closed until further notice.

Overnight, all SkyCity hotel guests were successfully accommodated in other hotels around Auckland.

"Once the extent of the damage to the NZICC and Horizon Hotel (which is also under construction and located adjacent to the NZICC) is known, SkyCity will, in consultation with Fletcher Construction Company Limited (the main contractor for the NZICC and Horizon Hotel), be able to determine the impact on the project delivery timeline.

"It is expected, at this stage, that there will be a further material delay to the completion dates for the NZICC and Horizon Hotel."

SkyCity also confirmed that contract works and third party liability insurances are in place for the NZICC and Horizon Hotel projects.

The company thanked the fire and emergency services teams working hard to contain the fire and "to hotel operators around Auckland for their cooperation to accommodate SkyCity hotel guests at short notice."

John Coop, the Warren & Mahoney chief and whose business is one of three firms which designed the centre, refused to talk this morning, saying it was up to others to make comment.

The convention centre fire last night. Photo / Dean Purcell
The convention centre fire last night. Photo / Dean Purcell

However, fellow Warren and Mahoney architect Richard Archbold tweeted to a sympathetic statement: "Thanks e hoa, we've had some setbacks but this is a kicker."

SkyCity architect Gordon Moller of Moller Architects was also reluctant but did express satisfaction at the speedy evacuation from the buildings yesterday.

Meanwhile, former Fletcher chief who ran the construction division for years has expressed empathy for the workers on the blazing NZ International Convention Centre site, expressing sadness at the effect on the tradespeople's lives.

"I feel really sorry for the boys, they worked so hard," said an upset Jack Smith, author of two books on the business which won the head contract to build the $703 million centre, due to be finished later next year.

"I can only wish them the very best because they have tried so hard," said the retired author of No Job Too Big: A history of Fletcher Construction, Vol 1: 1909-40 and No Job Too Hard: A history of Fletcher Construction, Vol 2: 1940–65.

Smith began at Fletcher Con­struction in 1953 and became general manager in 1967. Asked who inspired and mentored him, former Fletcher executive Dr John Hood called Smith "the doyen of post-war New Zealand construction."

Smith today expressed disappointment in Fletcher ever having signed the convention centre deal: "They entered a bad contract which is surprising because we did such a great job on building the original and then another building," he said referring to Fletcher's SkyTower, casino and hotel work. - Additional reporting, Business Desk