Much ado about nothing

February 12th, 2013 at 1:14 pm by David Farrar

Hamish Rutherford reports at Stuff:

Maurice Williamson is under pressure to stand down as Building and Construction Minister, because of his role as a director of a company associated with collapsed construction group Mainzeal.

Associated with! Sounds bad. Did Maurice make Mainzeal collapse? No the company is what is known as a supplier!

The National MP for Pakuranga is a director on Holyoake Industries, an air conditioning specialist which had worked on a number of projects with Mainzeal, which collapsed into receivership last week.

Yes. Companies work together on building sites. Plumbers and electricians work together. Architects and builders. Still yet to see what the issue is.

Labour Party deputy leader Grant Robertson said it was inappropriate for Williamson to hold the building portfolio while he was potentially making decisions concerning Mainzeal.

”He [Williamson] is the director of a company which has had a long and deep relationship with Mainzeal,” with projects the two companies had worked together on including the Supreme Court,” Robertson said.

”Our concern is that if he is making decisions about the future of Mainzeal, that may well have an effect on Holyoake industries.”

This is really desperate stuff. The Minister is not making decisions on the future of Mainzeal. The receivership is a matter for directors, shareholders and staff.

Labour and Green MPs have generally never worked in business. This allows them to claim any MP with any business interest is somehow conflicted. In their ideal world I guess no MP would have any business background.

Let us look at this issue. Grant Robertson is saying that it is possible that Maurice Williamson may make a decision on Mainzeal and that this theoretical decision could possibly have an effect on Holyoake and hence the Minister must resign his portfolio.

Are you serious?

In a statement Williamson said he had instructed officials that he would ”not receive papers on and would withdraw from discussions about heating and ventilation” because of his association with Holyoake Industries.

”I will continue to deal with issues related to Mainzeal, where that does not conflict with my declared personal interest.”

As is appropriate. But to claim that he can’t deal with any issue re Mainzeal because he is involved with a company that has done some work with Mainzeal is just ridiculous. It’s like saying if you are involved in a trucking business you can’t deal with any issues around supermarkets because they get their food delivered by truck.

A spokesman for prime minister John Key declined to comment other than to say it was ”not a story”.

Or shouldn’t be.

I would make the general point that I do think it is best for Ministers not to have outside directorships – for a number of reasons. But if you have them, you declare them and recuse yourself on issues affecting them – as Maurice has done. Calling for his resignation on the basis of he may make a decision on Mainzeal that may affect Holyoake is just silly politics.

UPDATE: This has just fizzled even more. PM has confirmed in the House that Holyoake is not a contractor or sub-contractor to Mainzeal. Basically they once worked on a couple of building sites together!


February 7th, 2013 at 11:00 am by David Farrar

James Weir at Stuff reports:

The high cost of repairing leaky buildings is a big factor in commercial builder Mainzeal’s receivership, an industry source says.

Mainzeal Property and Construction, begun more than 40 years ago, was put into the hands of receivers yesterday.

It employs more than 400 people.

The firm is the country’s third-largest construction company, behind Fletcher Building and Hawkins Construction. …

A source said Mainzeal had been effectively killed off by several leaky apartment buildings that it was repairing, some of them costing many millions each to fix.

Mainzeal had been involved in their construction, but ended up as the “last man standing” because others involved, such as architects and designers, had already folded, the source said.

Profit margins on other projects had been too small to cover those repair costs.

Another victim of leaky homes. Very sad both for the economy, and for those directly employed or sub-contractors.

Some of their existing projects may continue on in receivership, as they are presumably individually profitable. So the impact may be less than we expect. But still bad news, and somewhat surprising considering the construction boon. But one big job you make a loss on can wipe out lots of jobs with small profit margins.