Kawarau Falls construction continues

The Kawarau Falls project. Photo / Chris Gorman.

Work on the $1 billion Kawarau Falls Station luxury resort project near Queenstown by embattled developer Nigel McKenna is continuing.

The McConnell family's Hawkins Construction won the contract to build the hotel project off Peninsula Rd on the edge of Lake Wakatipu.

In May last year, Melview (Kawarau Falls Station) Investments and Melview (Kawarau Falls Station) Development, were put into receivership by Australian lender BOS International, about the same time about 500 people were working on the site.

Despite this, building work on the initial stages continued.

The two Melview companies are now in liquidation, receivership and have voluntary administrators appointed.

The latest report from receivers KordaMentha, issued in July, said BOS was owed $219 million by the two companies.

In March, McKenna is due to appear at the High Court in Auckland to fight a bankruptcy application brought by Fletcher Construction over a payment for building Wellington's $100 million Holiday Inn.

McKenna says the application is not fair or equitable and that the global financial crisis is to blame for problems.

Loans to develop the Queenstown project by United and Hanover have since been taken over by Allied Farmers, which last month listed some of its biggest loan assets as Peninsula Rd Stage 2 at $74 million, Peninsula Rd Stage 2 $22 million and Melview (Kawarau Falls) Stage 1 $20 million.

Only the initial stages of the resort, on a 6.5ha north-facing hillside rolling down to the lake, have been built.

McKenna initially planned a much larger mixed-use project with hotels, apartments, private residences, worker housing and associated services including spas, gyms, restaurants and cafes.