Hawkins drops High Court action in power stoush

A Hawkins construction site

Hawkins Construction is dropping High Court action in its stoush with two power companies and the contract for a substation in Auckland.

New Zealand's second biggest construction firm finished its work on the Hobson Street substation last year but is in a fight with Vector and Transpower over the contract for the project, which was part of a $419 million power grid upgrade.

Earlier this month, Hawkins indicated it was seeking an interim injunction to stop the power companies from enforcing payment of a performance bond for the project.

A performance bond is issued to a client while work is being undertaken to make sure it is done in accordance with a contract. If it is not, the client is entitled to the bond as compensation.

But Hawkins this evening said it had reached an agreement with the power companies and settled invoices relating to "over payments" and as such, Vector and Transpower had withdraw notices calling on the performance bond.

Hawkins will now withdraw its application for the interim injunction and discontinue the High Court proceedings relating to this bond, the company said in a statement this evening.

The application for the interim injunction was due to be heard in court tomorrow.

However, the parties are still in a dispute over a "substantial sum that Hawkins claims it is entitled to be paid arising from its performance of the contract", the construction company said.

These outstanding issues are set to be resolved out of the courtroom in a "formal dispute process".