The Australian company involved in the Christchurch Metro Sports facility owes more than $4.5m.

As first reported by Chris Lynch Media, Benmax, which was contracted to deliver the mechanical services for the Metro Sports Facility and the Christchurch stadium, folded its New Zealand operations on Thursday last week.

Staff were given just several hours notice before being told to leave the offices in Christchurch and Wellington.

In the liquidator’s first report, it said the company owed unsecured credits $4 million.

It owned “preferential creditors” $544,000.

The company owned staff wages and holiday pay of $169,000 and owed Inland Revenue $375,000.

The reasons given for the collapse were “Benmax NZ was impacted by the industry’s unprecedented and well-reported challenges.”

“Delayed construction projects awarded before or during the early stages of COVID, combined with unexpected inflationary increases in material costs, ongoing supply chain issues, and labour shortages, saw project margins eroded, directly impacting the business’s financial position.”

The report said “despite the best efforts of the Benmax team and a significant financial investment into the business by shareholders, the company could not overcome the challenges. The directors sought professional advice and decided to liquidate the company.”

Canterbury Employers’ Chamber of Commerce CEO Leeann Watson said it was “an unfortunate and disappointing development which we assume will impact the timeline for completing the project.”

“It is indicative of the ongoing challenges and uncertainty that Canterbury businesses are currently facing,” Watson said. 

Te Kaha Project Delivery Chief Executive, David Kennedy told first told Chris Lynch Media “the sub-contractor had begun some detailed design work, but was confident works can be delivered without impacting the opening date.”

Christchurch Central City MP Duncan Webb was approached to comment on the situation but declined.

However, National Party Leader Christopher Luxon said “you’ve got to ask the questions, what sort of oversight has there been over the contractor?”

“I just can’t understand what exactly has happened there.”

Luxon said the Government should have been looking for New Zealand contractors” in the first place he said.

“Overseas firms don’t understand local conditions on the ground and what we end up is paying the same amount a New Zealand firm originally put forward.”

Luxon said “I think there’s a fair challenge to make sure that we are looking closely at New Zealand firms and what their offerings are.”