(Bloomberg) -- New Zealand’s flagship international convention center project faces further significant delays after a massive fire at the central Auckland construction site destroyed the roof and badly damaged the building.
The blaze, which continued to burn Wednesday afternoon -- some 28 hours after it began -- has been contained and is no longer at risk of spreading, Fire and Emergency New Zealand said. About 80 firefighters remain on site waiting for the fire to burn itself out and the roof to collapse, it said.
SkyCity Entertainment Group, which owns the NZ$700 million ($449 million) project, said it will work with construction contractor Fletcher Building to assess the extent of the damage before determining the impact on project delivery. Both companies said there will be a “material delay” but are unable to be more specific until they have been cleared to enter the building.
“This has been absolutely devastating for us at SkyCity, for Fletcher and for a lot of people in this community,” SkyCity Chief Executive Officer Graeme Stephens said on a conference call earlier Wednesday. “The damage is significant. Stating the obvious, that will lead to a material delay. We’ll be working with Fletcher to re-calibrate expectations once we know the full impact.”
The blaze is the latest setback for the convention center, which was expected to boost economic activity in New Zealand’s largest city. Its opening has been delayed several times, most recently until late 2020, amid capacity constraints and difficulties in the construction sector. Doubt has now been cast on the chances of the center hosting conferences as planned from March 2021, including the scheduled Asia-Pacific Economic Cooperation leaders’ summit in late 2021.
APEC Meeting
Prime Minister Jacinda Ardern, who visited the site, told reporters the APEC event will still be held in Auckland and there are contingency plans in place if the conference center can’t be used.
SkyCity evacuated its casino precinct yesterday, including relocating hotel guests, while other businesses were forced to close as toxic smoke billowed across the central city. Police blocked roads, creating traffic congestion. SkyCity expects to able to access its buildings later tomorrow with a view to opening them to customers on Friday, Stephens said.
The company’s shares have dropped 3.3% since news of the fire broke. They closed at NZ$3.85 in Wellington Wednesday, having been as low as NZ$3.71. SkyCity said contract works and third party liability insurances are in place for the center and the adjacent Horizon Hotel, which is also under construction. Stephens said he is “comfortable with the credibility” of the project insurer, which is an international company he declined to identify.
Fletcher Building Chief Executive Ross Taylor said his company faces a “very large rebuild” on the site and is committed to finishing the project. The fire damage is to the top floors and roof of the building but there will be extensive water damage, he said, adding that demolition is unlikely. Fletcher shares rose 1.3% to NZ$4.71 after declining 1.5% yesterday.
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