Christchurch company Traffic Control Systems, which was contracted by the council to maintain and repair traffic lights, owes over a million dollars to unsecured creditors.
Staff were informed of their job loss a week ago after the liquidator, Insolvency Matters, sent an email a day before they were due to return to work.
In the liquidator’s first report, it was said that the company’s insolvency was due to “struggles during Covid lockdowns.”
According to the director, revenue had steadily declined over the past six months due to a lack of contracts, making the business unsustainable.
The director sought professional advice and decided to place the company into voluntary liquidation.
Preferential creditors include staff wages and holiday pay, estimated at $70,000, and the Inland Revenue Department for GST and PAYE, estimated at $100,000.
About 86 unsecured creditors are estimated to be owed $1.2 million.
Traffic Control Systems headquarters in Wigram
The company had been awarded eight major intersection upgrade projects in the past year, with contract values ranging from $250,000 to $2 million, a former worker claimed.
The Christchurch City Council wouldn’t say how much money it had paid the company or when it became aware of its collapse.
However, Head of Transport and Waste Lynette Ellis said the Council had two existing contracts with TCS—one for maintenance and one for capital works/upgrades to intersections.
“As your questions have commercial implications, the Council is unable to provide a response at this stage. We will be working closely with the liquidators to ensure any risk to the Council is minimised,” Ellis said. “We want to assure the public that we have contingency plans in place to enable the continued smooth running of the network.”
