Scaffolding removed from Sofitel So hotel over payment issues

The construction process of the Sofitel So has been slow moving.

Scaffolding has been taken down before work is completed on what was promoted as Auckland's newest five-star luxury hotel.

All the steel form work was stripped off the high-rise ex-Reserve Bank at 67 Customs St East which was this year meant to be opening as the $50 million 133-room Sofitel So.

Mark Irvine, managing director of Acrow which erected then removed the scaffolding, said the issue was non-payment from the building firm working on the job.

"We started putting it up in October 2013 and we did it progressively as they required it. But there were payment challenges right from the start," Irvine said.

The building is owned by interests associated with Auckland's wealthy C.P. Group and the Pandey family and French-headquartered Accor was due to operate the building under one of its top brands.

Irvine said the construction contract was not with C.P. but a Korean building business. Jonathan Williams, C.P. Group's project director, said Plus Construction NZ and its Korean parent was delivering the project on a lump sum price basis.

"The construction contract, as is usual in the New Zealand construction industry, is underwritten with a contractor issued performance bond. This is a financial instrument that ensures the contractor performance on the project and the developer can rely on this.

"The construction process had been slow-moving due to a larger than expected demolition phase which has lengthened the overall programme. It had also previously noted that final building consent was not obtained until November 2014.

"Plus Construction are responsible for all aspects of construction including access and protective scaffolding," Williams said.

He was aware of payment issues but said he hoped those could be worked through so the project could proceed in an unencumbered way.

Only a tower crane now remains on the top level. Open steel framing has been erected on the upper levels to add extra floors.

Acrow is owned by successful Auckland building entrepreneur Brett Russell of Dominion Constructors and Russell Group which also owns Stresscrete, Russell Bricklayers, Aotea Paving and Masonry Concepts.

Acrow says it is the largest scaffolding, formwork, falsework and event infrastructure company in New Zealand. It has headquarters in Penrose and employs more than 300 people.

In Wellington, Dominion is busy on a new Sofitel in Boulcott St.

Sofitel has acknowledged delays in Auckland. Garth Simmons, Accor New Zealand and Fiji vice-president, said last month his company was still on track to open the hotel, just a lot later than expected.

"The construction process has been slow-moving due to larger than expected stage one demolition works.

"The final planning consent was only approved in November. However, the owner/developers are currently investigating expanding the original plans which may entail another round of development consent."

In Wellington, Russell's Dominion Constructors is building the new $22 million Sofitel which Accor will run.

Dominion said the hotel was due to be finished in 2013 but a hotel expert said it was taking longer than initially expected because plans were changed.

"They reconfigured some of the hotel and added extra levels so this delayed the start of construction," he said.

On an American website, Pandey Hotel Corporation says it has become "one of Australasia's major owners".

Construction woes
*5-star hotel planned.
*Developed at 67 Customs St East.
*Scaffolding erected late 2013.
*Removed last month.