Council liability under Construction Contracts Act


16 March 2017

Council liability under Construction Contracts Act

A determination has been reached by an authority establishing that the Clutha District Council has a liability to pay the sum of $1.963 million in relation to significant contractual works undertaken some years ago.

A Council meeting has been held and a resolution passed to ensure that the Clutha District Council makes payment and meets its contractual obligations.

The determination and all details surrounding it remain confidential pursuant to section 68 of the Construction Contracts Act 2002. The other party to the contract has not consented to any disclosure of any further details.

While the incident in question dates back a number of years, Council wants to acknowledge it should never have happened.

Mayor Bryan Cadogan said he is "sickened" by the situation.

He said the frustration that a project from so many years ago now comes back to haunt us is rightfully a concern for all ratepayers.

The determination highlighted deficiencies that needed to be addressed and while all possible measures are now in place, such as an audit and risk committee with an independent chair and major project supervisory groups, to ensure this can't happen again, Council will be conducting a further review to ensure our processes are as robust as possible.

Council has recently successfully completed the $3.1 million upgrade of Balclutha's main street under the new structures.

We also have numerous other projects currently being managed under these structures which are tracking well.

Council only received this determination late last week and we are now assessing our options to make sure we do the best by our ratepayers.

Given that, we are not able to make any further comment at this time.


You can contact Mayor Bryan Cadogan on 027 476 3595, but he is limited to commenting to the above release.

Page reviewed: 16 Mar 2017 4:38pm