Building industry figure weighs in

### ODT Online Sat, 4 Apr 2009
Stadium quotes and design steady: builder

By David Loughrey

Last Sunday, a public meeting at the Dunedin Town Hall heard a wide range of arguments from a line-up of speakers on why the city did not need a new stadium.

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Filed under Design, Economics, Geography, Hot air, Media, Politics, Site, Stadiums, STS

7 responses to “Building industry figure weighs in

  1. Phil

    Lund South. This would be the same Lund South that faced breach of contract issues over their last two major council contracts ? Relating specifically to time and costs. I would take that endorsement with a grain of salt.

  2. Phil answer me this. They faced them, but were they found in breach of them?

    I tend to take actual industry figures who know what the hell they are talking about over the likes of mad mad Bev Butler who is still trying to make people bad debtors.

  3. David

    If fixed price contracts are so rock solid, then why are they not used all the time, like when the $100m Milton Prison was started – errrr, I mean the $300m Milton Prison.

  4. Yeah, but were they ever actually found in breach of contract like you claimed.

    Yes fixed price contracts are used, all around the world in fact. They were used in the Wembley debacle, and thank god they were. It cost the Aussie company that more or less did it’s best to destroy that project. All around the world there are contracts that come with penalty clauses if projects are run to cost or time. The StS claim that there hasn’t been a stadium built on time or within cost, yet it took me all of 5mins on google to find plenty of examples.

    Now the StS is lying again claiming that the stadium is inferior and poor materials will be used. That is an out and out lie, so why aren’t you running them through the ringer?

  5. Phil

    Paul, the company concerned had liquidated damages applied to them in Council contracts. People involved in construction projects will tell you how difficult it is to apply such a financial penalty. So difficult that few contractors or clients take much notice of it. It takes a lot to invoke this remedy and the contractor has to be shown to have really lost control of the contract for such a clear cut situation to arise. So yes, they were indeed found to be in breach. I hope that answers your question.

  6. Thanks yes that does answer my question.

    It may be perceived to be hard to enforce on the small scale in NZ, but it is how many major (of which this is) project is managed overseas. I watched the Wembley and another project with particular interest over this very matter. I have close friends and relatives in large construction companies in CHCH and they have all confirmed that these clauses are indeed in use in NZ, and they said there is no reason that this couldn’t be applied to the stadium construction here in Dunedin.

  7. Phil

    I’m not denying that those clauses don’t form part of contracts, they are standard items. I probably didn’t explain myself very well when I spoke about parties not bothering about them. What I meant was that, in order for the clause to be invoked, it must be crystal clear without any argument, the the sole reason for the delay or cost over run, was negligence on the part of the contractor. There are usually so many variables such as design changes, weather issues, client issues, and the like, that it is very difficult to lay the blame purely onto one party. Which is why most parties, while acknowledging them, don’t spend a lot of time worrying about them. You have to really screw up in order to get hit by those penalties. There are so many ways of worming out of direct responsibility. I’m not up to speed with the whole Wembley debacle but I recall that the head contractor sued the Football Association over imposed time delay penalty costs. Not sure how that all came out in the wash. I had a feeling that the FA may have backed down, I guess illustrating how difficult it is to enforce liquidated damages.

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