‘Ghost town’: government-funded community housing project in limbo as currency dispute rages

Contractors who worked on a government-funded community housing project that presents itself as a role model for others have run out of tools, furious that they haven’t been paid. Report by BLAIR ENSOR and TONY WALL.

In a rural housing development north of Christchurch, the only residents are nesting birds and a pair of paradise ducks.

Alpacas and horses graze peacefully in the nearby paddocks.

The windows of the six new houses on this land in Tuahiwi near Woodend are covered in dust, having been empty for more than eight months.

The houses are almost finished, with only landscaping and interiors to come.

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Rather than the thriving low-income whānau community it was supposed to be, it has a ghostly feel.

The project is in limbo, as the trust behind it and the developer fight over a huge cost explosion that increases by the day.

The development was commissioned by the Mana Waitaha Charitable Trust (MWCT), whose role is to help resolve chronic housing difficulties suffered by members of Ngāi Tūāhuriri, a hapū of Ngāi Tahu.

The idea is for low-income Kaumātua and families to return to the site, which is near the Tuahiwi marae, and comprehensive services will eventually be included.

The project has received $ 2.3 million from Te Puni Kōkiri, (TPK), the Maori Development Ministry, as part of its papakāinga community housing scheme. The Ngāi Tūāhuriri Rūnanga, owner of the land, contributed $ 330,000 from his own funds.

Stuff understands that the budget skyrocketed by hundreds of thousands of dollars due to the council’s additional infrastructure demands.

Maori Development Minister Nanaia Mahuta, who changed the land with development in April last year, says she asked TPK to do “strong due diligence” of papakāinga projects and is confident that the problems in Tuahiwi will not they will affect many other similar projects. .

“We continue to refine the way we work with whānau to achieve their aspirations in this area.”

Caught in the middle of the dispute in Tuahiwi are subcontractors, who are owed thousands of dollars for work already completed.

“It’s pretty disgusting, really, especially when we were told at the start of the project that all the funds were available,” says Craig Stevenson, who is owed $ 76,000 by Nor West Contracting for drainage, earthworks and roads.

Mason Wairau, who was hired to paint the houses, is out of pocket too.

He doesn’t want to publicly point an accusing finger, but says that “when things go wrong, someone has to be held accountable.”

“As contractors we do the tough jobs … and it hurts when … you don’t get paid.”

MWCT contracted the construction company Homeco to manage the project; each party blames the other for the dispute.

Homeco boss Rhys Head says the project was completed on budget, except for the “significant” additional civil infrastructure costs imposed by the Waimakariri District Council.

The fees were largely paid by Homeco, he says, but Mana Waitaha “decided not to reimburse Homeco for costs incurred.”

The trust, on the other hand, says the contract was for a fixed price, but Homeco did not stay within budget and did not inform the trust until the houses were nearly finished.

“Mana Waitaha has paid part of this amount, but [we] They have been informed that many of the amounts that Homeco has claimed are either not payable at all or are exaggerated, ”says the president, Dr. Te Maire Tau.

The trust has instigated an independent review of costs, but Head indicates that it is reaching the end of its limit.

“This has been going on since December, with no contact or involvement from MWCT. . . from February to June and minimal contact during the duration, ”he says.

“Patience is wearing thin.”

It is understood that a clause in the construction contract means that Homeco is being punished with daily fines.

Head says his company has “given up revenue” to pay some of its suppliers, but is now in a position where it has been unable to meet some payments.

“We need MWT to progress the payment of the settled items within the claim so that we can convey that.”

Tau says the trust’s “key concerns” are “completing the houses for our people and ensuring that subcontractors are paid. This may not be fast enough for some, but we are. . . ensure that project completion is carried out responsibly.

“We will complete this housing project for our people as planned.”

Tau says that there has been speculation among the hapū members that the rūnanga land could be lost in the dispute, but “this is legally incorrect.”

The purpose of the project, he says, is to act as a test case for building on Maori land in the area.

Ngāi Tahu had been prohibited from building on his reserves since 1965 because Maori lands had been converted for rural development.

In 2015, the trust, the Crown and the Waimakariri District Council agreed to new zoning regulations that allowed iwi to build on their land.

A council spokesperson says the additional infrastructure costs imposed on the Tuahiwi project are not unusual.

“They are typical of such developments through the engineering design and resource consent approval process.”

Karen McGuinness, Te Puni Kōkiri acting director of investments, also says delays in building developments are not uncommon and that the department will support confidence through the process, “to achieve your dream of housing.”

She says Te Puni Kōkiri provided an additional $ 160,000 to the project in March, to cover some of the council’s additional costs. The trust assured the department that it would cover any additional costs to complete the project.

McGuinness says the department is withholding $ 50,000, which will be paid once the homes are completed and the code compliance certificates are received.

Nicole Manawatu-Brennan, granddaughter of the late rūnanga upoko Tani Manawatu, has long been concerned about the fairness of the process in which Homeco was appointed as prime contractor.

In emails sent to Te Puni Kōkiri South Island regional manager David Ormsby in February last year, she said that many whānau-owned companies wanted to participate but did not bid.

“I am of the opinion that the best price may not have been achieved,” he wrote.

Ormsby, a founding member of the MWCT who has since retired, responded by saying that the project’s costs “fall within our benchmarks.”

Any calls for a review of the builder’s selection should go to the trust, as it is “accountable to its stakeholders for the decisions that are made,” he said.

What has happened since then, Manawatu-Brennan says, is “embarrassing.”

Despite asking lots of questions, you still don’t know why MWCT decided to hire Homeco.

He strongly holds the view that those involved in the trust lacked knowledge of the construction industry, rushed to get the project underway and did not execute a proper procurement process.

“I think Mana Waitaha is to blame here.

“I just think they didn’t fulfill their duty of care, and they were quite negligent and actually I think … there was a level of arrogance in thinking this is going to be easy.”