By Bernard Orsman
The Britomart project struck a major obstacle last night when the Auckland City Council rejected an ultimatum from the developers to pay $15 million towards costs incurred by delays.
The development partners told councillors they had legal papers and a top Queen's Counsel to act for them and would
not hesitate to go to court if they did not get the money.
However, developer Jihong Lu, senior executives of the financier, Salomon Smith Barney, and the building contractor, Walter, were shocked when councillors voted 9-8 to reject their demand.
After a seven-hour discussion behind closed doors on the controversial transport centre, mayor Christine Fletcher emerged to announce the decision.
She said the council still wanted to pursue the revised Britomart scheme and would continue negotiations with the partners.
Mr Lu said the partners also wished to proceed and would hold fresh talks today with council negotiator Peter Menzies.
It is not clear what is left to negotiate as the council has now refused three times to pay the $15 million to the developers.
Earlier in the evening, Mr Lu told the New Zealand Herald the developers' patience with the council was running out fast and it was "crunch time."
"If there is no clear resolution we will have to look at other remedies to manage our investment ... including legal action, but I hope it won't come to that."
Mr Lu said the partners had already absorbed more than $15 million from delays to the $220 million project and they were looking for a "fair" contribution from the council.
A spokeswoman for Rethink Britomart, Amanda Reynolds, was ecstatic at the decision.
"The council has very prudently taken the staunch view that you can't keep frittering money away for no return."
Far from the original $17 million price-tag for a surface-level station, Britomart has spiralled in price and is now projected to cost ratepayers about $164 million.
Of late, the council has decided to spend another $5 million on changes to the project and another $6 million towards the rail tunnel leading into the underground transport centre.
