This was a large contributor to the cost blowouts which have led to Fletcher incurring severe losses within its construction arm.
Investors will be hoping that Fletcher's previous cuts to forecast operating earnings have been sufficient and there is not another tsunami of red ink ahead. But more fundamentally, Norris needs to shed more light on how Fletcher let these projects get away on them.
First of all, Norris needs to quit the charade and simply name the projects. It is the height of absurdity to continue to claim confidentiality when in the case of one of these projects - the Auckland convention centre - some close to SkyCity are openly congratulating themselves on negotiating tight legal contracts which left most of the risk with Fletcher.
Time must be set aside for full explanations when the company unveils its full-year financial results at its Penrose HQ this morning.
In discussions with prior Fletcher Construction personnel, it would appear they felt under pressure from Adamson to notch the two contracts.
The Justice Precinct is one of the "anchor projects" which were planned as part of the rebuilding of quake-stricken Christchurch.
The Justice Department engaged Warren & Mahoney to begin design work. Fletcher was then brought onboard to work with W&M to further develop the plan to ensure "constructability".
But at a crucial point - ahead of design finalisation - Treasury "novated" the contract to Fletcher Construction.
As legendary former Fletcher Construction boss Jack Smith puts it - "novation is a dangerous game".
Smith's contention is that novation has been favoured by developers who screw down the architect's fees, go out to bid on half completed plans, novate the architect to the builder, and put the financial risk of completing a physically satisfactory building to the developer's brief. He believes many leaking high-rise buildings have resulted from this form of tender.
However, while 'design and build' contracts have become more common for major projects it would appear from discussions with Fletcher personnel that not sufficient attention was paid to derisking these signature projects.
When it comes to the Justice Precinct, manpower resources were already taxed in Christchurch. Prior executives suggest not sufficient of the right people were put in place to manage it.
The question Norris has to address is why Fletcher failed to manage the design within the contract price and let construction fall behind. And why when the pressure went onto Fletcher, a representative wasn't dispatched to let Government know this was a no go. The SkyCity project is different. Again former personnel suggest it might have been prudent not to have taken the project on in the first place.
It was after a "creative" deal between Cabinet Minister Steven Joyce and SkyCity which set the scene for hard ball all round.
Norris should explain what then went wrong. Were there adverse contract conditions (for the builder) in the tender documents - as has been suggested. If so, were these tagged by Fletcher's estimators and did the divisional manager give them away in negotiations because he felt under pressure to get the deal?
And if so, why didn't the Fletcher board not have sufficient eyes and ears within the company and within the commercial and legal communities to alert them to the growing risk?
The upshot of all this noise was that Adamson did take a strategic decision to derisk future contracts.
A senior Fletcher executive was dispatched to call Otakaro in Christchurch to let it know Fletcher Construction had ruled itself out of contention for the contract to build that city's new Convention Centre.
Otakaro Limited is a crown company which is project managing some prime anchor projects in Christchurch.
Fletcher was not prepared to go tailend Charlie at this stage in another novated contract in Christchurch where it could be left bearing too much risk. Another major contender - Hawkins (now owned by Downer) - also dropped out. But Adamson's initiative was too late to save his own job.
It's understood the directors are now steeling themselves for mea culpas all round when they front shareholders at Fletcher's October AGM.
That's nearly three months away. Norris should inform shareholders today what changes the board has made to its processes to ensure the construction fiasco is not repeated.
Does the board now have sign-off for major contracts? And what changes are proposed at board level to bolster directors' performance for the future.
