Two companies linked with the $1 billion Kawarau Falls development on Lake Wakatipu have had receivers appointed by Bank of Scotland International and up to 500 jobs as well as the future of the project are at stake.
KordaMentha has been appointed receiver for Melview (Kawarau Falls Station) Investments and Melview (Kawarau Falls Station) Development Ltd. Spokesman Brendon Gibson said it will take two months to prepare a report and the future was difficult to predict.
'This is a complex development being built in multiple stages. Our immediate task will be to understand the construction costs and associated revenue streams for the project. The current intention is that construction work will continue to be funded in the interim,' he added.
Property Council chief executive Connal Townsend said the problem lay with the banks and not the developers. 'I think the real issue is not actually the developer or even Queenstown but the nature in New Zealand of trying to get funding from banks and the pressure international banks are under,' he explained.
'In the current climate banks change far more rapidly than the market can keep up with and construction firms and developers are just not able to respond with the same speed. Any large-scale property development will plan to refinance some years ahead but the rate of fall is so rapid. We used to have domestic lenders or finance companies that could step in and they're not there any more,' he added.
He is now calling for the government to get involved to help bail out phase one of the development because is it of such national significance.
Planning permission for the development on the former Kawarau Falls camping ground, near the Kawarau bridge was granted in July 2006, construction started in 2007 and it was scheduled for completion in 2011.
It includes a collection of hotels offering about 1000 rooms across a variety of levels of accommodation and set among boulevard-style streets, restaurants and parks. Phase one will see a five-star waterfront hotel with 178 rooms on eight levels and a second hotel 98 bedrooms and a health spa.
