SkyCity fire: building products compromised, 'hard bargaining' to come

Tuesday, 19 November 2019

Video footage shows flooding inside the SkyCity Convention Centre after the fire.

Fletcher Building and its suppliers for the fire-damaged SkyCity Convention Centre are set to enter a stage of hard bargaining over product warranties and performance guarantees, sources say.

Construction and engineering sources told Stuff the days-long blaze at the centre would have melted large amounts of wiring insulation, compromised window seals and had various other effects on products already in place when the inferno erupted on October 22.

The key question at play would be exactly how much the ravages of the fire had shortened the life or reduced the performance of certain products.

Aerial appliances blast high pressure water on to the roof as the blaze burns on during day two.

John Tookey, an AUT professor who researches construction, said while the initial fire created huge damage, its after-effects would be similarly vast and long-lasting.

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Workers at the SkyCity Convention Centre are demanding proof that their workplace is safe after the fire which burned for three days in central Auckland.

'The key question for any supplier involved in the fire at the SkyCity convention centre is 'how seriously were our products affected?'' he said.

The next question would be for how long their products could now be guaranteed, he said.

'Fire damage is on a spectrum between total loss and minimal effects. Performance in service will certainly be compromised to some degree.'

Contractors, suppliers, insurers and underwriters would need to reach an agreement on the degree to which they owned any actual or provisional losses, let alone service guarantees, he said.

Professor John Tookey says the effects of the SkyCity fire will be vast and long-lasting.

'This will lead to horse trading between the various parties.

'Inevitably, in this sort of hard bargaining scenario, some parties will feel pressured into uncomfortable compromise.'

The final position for all parties would likely take many months, perhaps even years, to finalise, he said.

A Fletcher Building spokeswoman said assessing damage to building products inside the convention centre would take some time 'due to the complex nature of the safe re-entry process'.

Assessors would examine damage to the building and products, she said.

'The total cost of replacement and rebuild will not be known until all of this work has been completed. Insurance assessors will also be part of this process.'