Fletcher Building and partner settle motorway dispute with NZTA

Monday, 23 June 2025

Fletcher Building has reached a settlement with NZTA over costs associated with delays on the Pūhoi to Warkworth motorway project.

One of the challenges weighing on Fletcher Building has been settled, with news the company has resolved its issues relating to its Pūhoi to Warkworth motorway build.

The building industry giant has announced that Fletcher Construction Company and Acciona Infrastructure have reached a settlement in their dispute with the New Zealand Transport Agency (NZTA) and the Northern Express Group over the motorway project.

Fletcher Construction and Acciona were 50% partners in a construction joint venture that worked on the Pūhoi to Warkworth motorway, the first stage of the Pūhoi to Wellsford road of national significance.

The project officially kicked off in late 2016, and the road was meant to be open for traffic by December 2021.

But the road did not open until June 2023 due to delays and inefficiencies driven by the impacts of the Government’s Covid-19 pandemic response, and other challenges, including weather events.

The settlement represents progress, Fletcher Building’s Andrew Reding says.

Fletcher Construction and Acciona lodged a claim with NZTA and Northern Express Group seeking to recover costs associated with the Covid-related delays and weather-related disruptions.

The claims went to a dispute resolution process, and on Monday Fletcher Building told the NZX the parties have come to an agreement.

Fletcher Building said that as a result of the settlement it expected to recognise a loss on claims receivable of $16.4 million against the project position in the 2025 financial year. There would be a corresponding impact to full-year earnings before significant items.

The loss related to revenue recognised over the life of the project, and the settlement meant further cash proceeds of $56m from the project would be received by the group this fiscal year, it said.

While the settlement was lower than expected, it was a 'commercial resolution to a longstanding issue and avoids a drawn-out dispute”, it told the NZX.

Separate material claims under the contract works insurance policy for weather event-related damage to the project were still being negotiated with insurers, and their resolution would determine the final outcome of the project.

Fletcher Building chief executive Andrew Reding said the settlement represented further progress in closing out the legacy project issues that had absorbed significant management time and cost.

Fletcher’s New Zealand International Convention Centre build was first delayed by a fire in 2019.

Difficulties with a number of legacy projects have plagued the company in recent years. They included the New Zealand International Conference Centre (NZICC) in Auckland and Commercial Bay in Auckland, the Christchurch Justice Precinct, and the Wellington International Airport car park.

Of those, the NZICC has garnered the most attention. Originally delayed when a fire hit the nearly completed building in 2019, it was further delayed by Covid lockdowns.

Costs on the project blew out and hit the company’s books hard, but the NZICC is set to be handed over to SkyCity at the end of June and to open in February next year.

But earlier this month SkyCity announced it would sue Fletcher Building for $330m in damages, for losses sustained after lengthy delays to the opening of the NZICC.

The company has also had to deal with a long-running issue over leaky pipe problems involving its Australian subsidiary Iplex in Perth.

In February, it announced a $134m first-half after-tax loss, which came off the back of sharp declines in profit last year, and talked of challenging business conditions.

More recently, the company announced on the NZX that it had received “ongoing inbound inquiries from parties interested in its businesses”, but said no decisions had been made to sell any of its businesses.